For employers in the Garden State, 2019 brought a barrage of legal changes and new requirements. As 2019 comes to a close, we recap some of the most significant changes to the employment landscape in New Jersey.
In July 2019, the New Jersey minimum wage increased to $10 per hour. This number will increase again effective January 1, 2020 to $11 per hour, with few exceptions. This number will continue to increase every January 1 through 2024 when the minimum wage will hit $15 per hour.
Changes to penalties for wage violations
In some sweeping revisions to the state’s wage and hour laws, 2019 brought increased penalties for wage violations. Wage and hour laws are now subject to a six-year statute of limitations (tripled from two years) with the potential for treble damages (amount owed plus 200% liquidated damages) in addition to attorneys’ fees, civil penalties, and other potential damages. The changes also expand the definition of “employer” so that successor entities can be liable to an employee of a prior entity.
These changes come on the heels of the July 2018 enactment of the Diane B. Allen Equal Pay Act, which carries the same steep penalties and makes it unlawful to pay any member of a protected class at a rate less than those not in the protected class for substantially similar work.
Changes to the New Jersey Family Leave Act
The New Jersey Family Leave Act has been expanded to cover more employers. As of June 30, 2019, all employers with at least 30 employees (previously employers with at least 50 employees) are covered by the law. Covered employers must provide job-protected leave to employees to care for a family member or to bond with a new child. Notably, the amendments expand the definition of “family member” and increase covered situations for bonding with a new child to include placement of foster children and children born through a gestational carrier. The law also makes changes to intermittent and reduced schedule leave requirements, including allowing employees to take leave intermittently to bond with a child without the employer’s consent and reducing the notice period for such leave.
Expansion of paid family leave benefits
New Jersey has provided paid family leave benefits for several years through a program funded by worker payroll deductions and administered by the state. The law provides benefits for employees taking leave to care for a family member or bond with a new child. In 2019, the law underwent an expansion, which will take effect in 2020. Effective July 1, 2020, the program will provide paid benefits in additional circumstances (such as employees taking leave for reasons related to domestic violence), at a higher amount (an increase from 66.6% to 85% of an employee’s weekly wage, subject to a cap of $860 per week), and for a longer period of time (from 6 weeks to 12 weeks). Payroll deductions will increase to fund the expansion.
Protections for medical marijuana users
The New Jersey Compassionate Use Act was amended on July 2, 2019 to make it unlawful “to take any adverse employment action against an employee who is a registered qualifying patient based solely on the employee’s status as a registrant with the commission.” The amended law also imposes additional burdens on employers who drug test – requiring that they allow employees or applicants who tests positive to provide a valid medical explanation for the result. This amendment followed an Appellate Division decision in March in which the Court held that employers may need to accommodate an employee’s off-duty use of medical marijuana.
While the law specifically preserves an employer’s ability to prohibit possession or use of intoxicating substances during work hours or on the premises of the workplace, without a scientifically reliable method to test whether an employee is acutely under the influence, employers may be faced with difficult issues when it comes to their drug testing policies and procedures. There may be some preemption considerations associated with this amendment, but this has yet to be addressed by courts in the state. This is an evolving area of the law where we expect further developments in 2020.
Non-disclosure agreements and waiver of rights
On March 18, 2019, New Jersey enacted a law that rendered non-disclosure agreements unenforceable against an employee if the agreement has the purpose or effect of concealing the details related to a claim of discrimination, retaliation, or harassment. The law also makes it unlawful to waive substantive or procedural rights or remedies relating to any claim of discrimination, retaliation, or harassment. While this is likely preempted as to arbitration provisions, it could impact an employer’s ability to enforce a jury trial waiver of a claim under the New Jersey Law Against Discrimination.
Salary history ban
In 2019, New Jersey joined the growing list of states and other jurisdictions limiting inquiries into an applicant’s salary history. With the goal of closing gender- and race-based pay gaps, effective January 1, 2020, New Jersey employers cannot initiate an inquiry into an applicant’s salary history before making an offer that includes compensation details. Employers can still consider salary information if an applicant provides it voluntarily and without prompting or coercion. This law will require significant revisions to many recruiting policies and practices throughout the state.
Paid sick leave
Lastly, 2019 was the first full year that employers were required to provide paid sick leave to their employees. The law became effective on October 29, 2018, requiring employers to provide nearly every employee in New Jersey up to 40 hours of paid leave. Although dubbed “sick” leave, the law provides for coverage in several other situations including domestic violence, school-related conferences or meetings, and the closing of a child’s school due to a public health emergency. As 2019 ends, employers using a calendar-year benefit period should be aware of their obligations with respect to carry over or buy-back of unused hours.
Employers in New Jersey are faced with a multitude of new issues as a result of these changes.