On August 6, 2019, New Jersey enacted a new law increasing penalties and liability for employers who commit wage violations. The law revises New Jersey’s Wage and Hour Law (WHL), Wage Collection Law (WCL), and the Wage Payment Law (WPL). The main changes of this law affect anti-retaliation provisions, statutes of limitations, penalties, administrative power and oversight, and distribution of wage rights information. In addition, the new law introduces criminal liability to employers who commit wage rights violations or take retaliatory measures against employees.
Anti-retaliation: The new law makes it a criminal offense for employers to retaliate against employees who claim that the employer violated the WHL or WPL. The new law also makes two other changes in this regard. First, it expands the list of activities that are protected from retaliation. That list now includes:
- Reporting wage violations to the employer, NJ Department of Labor and Workforce Development (DLWD), or the employee’s representative;
- Beginning a proceeding under the WHL or WPL;
- Testifying at a proceeding under the WHL or WPL;
- Distributing information about New Jersey wage rights among employees; and
- Serving on a wage board for WHL.
Second, the law creates a presumption of employer retaliation if adverse employment action is taken within 90 days of a WHL or WPL complaint filed by an employee. An employer can only meet this burden by showing clear and convincing evidence that the adverse action was legitimate and not out of retaliation.
Statute of Limitations: The new law also extends the WHL and WCL statutes of limitation to six years, making them uniform with the WPL which also has a six-year statute of limitations. This is a dramatic change for the WHL, which previously only had a two-year statute of limitations. This also means that an employer’s liability for back-wages under the WHL is now much greater, as in some cases an employer may be liable for back-pay over a six-year period as opposed to a two-year period.
Penalties: The new law adds a new penalty of monetary damages under the WHL and WPL: liquidated damages of up to 200% of wages owed. Employers can avoid this penalty by meeting a range of factors, including showing that the error was made in good faith and that the employer reasonably believed that there was no violation. The law also adds an administrative penalty of up to $250 for a first-time violation, and double that for a second. Now, revised penalties for first-time violations range from a $500–$1,000 fine or 10–90 days’ imprisonment and range from a $1,000–$2,000 fine or 10–90 days’ imprisonment. The 200% liquidated damages penalty also applies to retaliation cases, as a $100–$1,000 fine and reinstatement, if the employee was discharged.
Administrative Power and Oversight: Additionally, the new law widens the DLWD’s power and oversight over employers who allegedly violate wage laws. Specifically, 1) it raises the claims cap from $30,000 to $50,000––giving DLWD oversight over larger disputes, 2) expands the department’s jurisdiction to hear retaliation claims and audit companies which the State Judiciary finds failed to pay wages or benefits with the power to suspend that employer’s license, and 3) requires the department to bring its own wage claim if it discovers a failure to pay wages or compensation. The law also exposes employers and labor contractors to non-waivable joint and several liability under the DLWD’s purview. Oversight is increased across the state, as the new law requires DLWD to share wage-related information with other state departments, such as the department of labor. Lastly, the DLWD is required to create a statement containing information about New Jersey’s wage laws, which employers will then be required to distribute to employees.
Criminal Liability: Lastly, the new law imposes criminal liability on employers who commit wage violations. The law makes it a “disorderly person offense” for employers to fail to pay wages or compensation under the state’s wage laws. This is extended beyond the WHL and WPL to New Jersey’s gross income tax law, temporary disability benefits laws, unemployment compensation laws, and workers’ compensation laws. The new law also makes it a “disorderly person offense” to retaliate against employees who participate in the activities described above. The fines described above apply.
In light of these significant changes and increased penalties and liability, it is advisable that employers ensure that their bookkeeping and wage practices are accurate and effective. Likewise, employees should be aware of these additional laws that help to fight unfair wage practices. If you have questions about these changes or have any legal questions, feel free to contact Ward, Shindle, and Hall.
