New Jersey Enacts a Major Expansion of the Penalties for Wage and Hour Violations, Including Jail Time
On August 6, 2019, New Jersey Lt. Governor Shiela Oliver signed into law yet another expansion of New Jersey’s employment laws. Notably, this latest amendment increases the potential criminal penalties and civil liabilities for employers that violate the state’s wage and hour laws. Most of the amendments went into effect immediately.
The changes, which New Jersey employers should take note of, include the following:
Employers who “knowingly and willfully” fail to pay employees their full wages, or unlawfully retaliate against an employee in violation of wage and hour laws, are subject to a fine of $500 to $1,000 and imprisonment of 10 to 90 days for the first violation, upon conviction. A second offense is punishable by a fine of $1,000 to $2,000 and imprisonment of 10 to 100 days, and a third offense carries a fine of $2,000 to $10,000 and potential jail time of up to 18 months.
Violations of New Jersey’s wage and hour laws, even inadvertent ones, carry criminal penalties for the first violation of $500, plus a penalty of 20% of the wages owed. Subsequent offenses carry fines of $1,000, plus the 20% penalty.
Employees who are not paid the full amount of their wages can recover, in addition to any unpaid wages, liquidated damages of 200% of the wages owed, plus reasonable attorneys’ fees. The 200% liquidated damages applies to both criminal and civil proceedings and is in addition to any criminal or administrative penalty assessed against the employer. The liquidated damages are mandatory, expect in a very limited situation.
Expansion of the unlawful retaliation provisions of the state’s wage and hour laws, including the creation of a rebuttable presumption of unlawful retaliation for adverse actions taken against an employee within 90 days of the employee engaging in a protected activity.
An increase of the statute of limitations for wage and hour claims from two years to six years.
Employers that hire subcontractors are subject to joint and several liability for any wage and hour law violations committed by the subcontractor.
A significant expansion of potential successor liability for wage and hour law violations.
A rebuttable presumption that an employee’s wage claim is valid when the employer does not maintain pay records required under the state’s wage and hour laws.
Given the significant expansion of New Jersey’s wage and hour laws, and the dramatically increased penalties, employers should take great care to review their pay practices to ensure compliance with New Jersey’s wage and hour laws. Businesses that hire subcontractors will also need to ensure the subcontractor complies with the state’s wage and hour laws and should include indemnification language in subcontractor agreements to minimize liabilities for any violations of the law by the subcontractor. Also given the expansion of successor liability, businesses involved in purchasing the assets of another entity will need to be even more careful then previously to ensure the seller’s pay practices have not created an undue risk of wage and hour violations under a successor liability theory.
If you have questions about New Jersey’s amended wage and hour laws or your business’s pay practices, please contact us at (201) 345-5412 or use our online scheduling page to set up a complimentary consultation.