On Tuesday, December 11, 2012, the New Jersey Assembly Budget Committee approved Bill A-3581, which would significantly increase penalties for employers who improperly withhold wages or other benefits from New Jersey workers. Although the bill must navigate review and additional legislative action before final passage, employers need to be alert to the increased fines, penalties, and new criminal liability if the currently being proposed version of the legislation becomes law:

  1. liquidated damages equal to 100 percent of the unpaid wages for violations of the statute;
  2. employer fines of $500 plus a penalty of 20 percent of withheld wages for all first offenses; rising to $1,000 plus 20 percent of withheld wages for subsequent offenses;
  3. criminal liability for employers who retaliate against employees for filing complaints under the statute; and
  4. State Attorney General notification to the Commissioner of Labor and Workforce Development when an employer is convicted under the statue. The Commissioner, in turn, may temporarily or permanently close the employer’s business by revoking its business licenses.

The proposed legislation faces its first test on December 17, when the full Assembly is to vote on the bill. The Assembly’s recent approval of similar legislation subjecting employers to license revocation if they fail to pay wages because of recording keeping violations strongly suggests that the legislation will pass. Our blog on that similar legislation can be found here.

Any proposed legislation, of course, ultimately needs the approval of New Jersey Governor Christie.

We will continue to monitor the status of A-3581 and update you in the coming weeks. In the interim, if you have questions concerning this bill or how it may impact your business, please contact the authors of this Alert or the Reed Smith attorney with whom you regularly work.