On August 6, 2019, New Jersey enacted the New Jersey Wage Theft Act (the “WTA”). The WTA amends various New Jersey wage and hour laws and largely goes into effect immediately. The WTA aims at penalizing employers who do not pay their workers wages due to them and expands the time period for bringing wage claims from two to six years. Workers may be awarded up to three times what they are owed, and in certain instances, fines, costs and jail time may be imposed on employers. Here are some key provisions of the WTA:
Retaliation Prohibition and Presumption of Retaliation
The WTA prohibits employers from taking a retaliatory action against an employee by discharging the employee or in any other manner discriminating against the employee because
• the employee has made an internal complaint or certain external complaints that the employer has not paid the employee all wages owed,
• the employee has testified or is about to testify in a proceeding involving violations of New Jersey wage and hour laws, or
• the employee has informed any employee of the employer of his or her rights under New Jersey wage and hour laws.
It will be considered presumptive evidence that the employer’s action was retaliatory if an employer takes an adverse action against an employee within ninety days of
• the employee filing a wage complaint with the Commissioner of the New Jersey Department of Labor and Workforce Development, or
• an action being brought by or on behalf of the employee in court.
Employers failing to pay all wages owed to an employee or retaliating against an employee will be subject to fines and/or imprisonment and must pay the employee all wages owed plus liquidated damages of up to 200% of the wages owed.
Liability for Violations by Contractors and Successor Liability
Among other things, the WTA creates added liability for employers when working with labor supply contractors and for successor employers. New Jersey employers are now liable for violations of NJ state wage and hour laws by their labor supply contractors. Significantly, this liability may not be waived by agreement. Consequently, if an employer obtains workers from a contractor or subcontractor, the employer and contractor/subcontractor will share liability for violations of the WTA. The WTA also provides for successor liability in instances where a predecessor business has failed to pay employees wages owed and includes a liberal definition of successor.
Maintaining Records and Notifying Employees of Their Rights
The WTA further addresses the importance of employer recordkeeping, as it provides that a worker’s claim for unpaid wages will be presumed valid where the business does not have sufficient employee records to show otherwise. While this presumption can be overcome, the absence of proper records will make it very difficult for an employer to do so. The WTA also requires businesses to provide existing and new workers with a written statement of their rights under New Jersey’s wage and hour laws as well as an explanation of how to file a claim in the event of a violation. It is expected that the required notice will be published on-line by the New Jersey Department of Labor and Workforce Development in the near future.
Steps for Compliance
Given the strict penalties imposed by the WTA, the presumptions of employer liability and the increased limitations period, it is expected that New Jersey will see an uptick in employee wage and hour complaints and lawsuits. Employers should familiarize themselves with all provisions of the WTA, some of which are not discussed here, and conduct a wage and hour audit to ensure compliance with the WTA. Other steps for compliance include making sure that complete and accurate wage and hour records are kept for employees, distributing the required WTA notice to employees, carefully selecting and monitoring labor supply contractors, and examining the risk of liability for wage and hour violations of any predecessor company.