New Jersey Appellate Division's Determination of Look Back Period for Wage and Hour Cases May Create Surprises for Employers
As we previously wrote about, in 2019, New Jersey enacted amendments to its wage and hour laws that, among other things, significantly expanded the statute of limitations and remedies available to plaintiffs. Specifically, New Jersey increased the statute of limitations for wage and hour claims from two years to six years. The amendments also provided that employees who recover unpaid wages are entitled to receive an award of liquidated damages of 200% of the wages owed (e.g., a plaintiff who recovers $10,000 in unpaid wages will also receive an additional $20,000 in liquidated damages). These amendments became effective on August 6, 2019.
Earlier this month, the Appellate Division of the Superior Court of New Jersey decided Maia v. IEW Construction Group, in which the court was presented with the issue as to whether the new statutory provisions apply to all cases filed after the effective date of the amendments or only to cases where the alleged wage and hour violation occurred after the effective date. The court held that the expanded remedies and six-year statute of limitations apply to any case filed after the August 6, 2019, effective date of the amendments, regardless of when the alleged violations occurred. Essentially, the Appellate Division reasoned that, at least regarding potential remedies, the law in effect at the time a claim is filed controls over the law in effect at the time of the potential violation giving rise to that claim. Thus, any lawsuit that was (or is) filed after August 6, 2019, will look back six years from the date of filing for potential wage and hour violations and entitle a prevailing plaintiff to 200% liquidated damages, regardless of whether the violation occurred before or after the amendents.
As a result of the Maia decision, employers may remain subject to potential claims that were thought to be expired based upon the previous two-year statute of limitations. For example, an employee who was not paid his full wages on March 15, 2018, would have until March 15, 2024, to assert that claim. In that hypothetical, the employer may have viewed the claim as time barred as of March 15, 2020, based upon the previous two-year statute of limitations.
Wage and hour claims can be particularly devasting to a business given the six-year statute of limitations, 200% liquidated damages, and attorney fee shifting. Thus, in addition to ensuring that current pay practices comply with the law, in light of the Maia decision, employers should also review their past pay practices to determine if there are any potential claims lying in wait to be filed.
If you have questions about your business’s wage and hour compliance, or other employment practices, please contact us at (201) 345-5412, or through our online scheduling system, to schedule a complimentary consultation.
Information contained in this blog is provided for informational purposes and does not constitute legal advice or opinion. You should consult with an attorney regarding the specifics of your matter or legal issue.