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New Jersey Passes Wage Theft Act: What Employers Need to Know

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New Jersey Passes Wage Theft Act: What Employers Need to Know

On August 6, 2019, New Jersey Acting Governor Sheila Oliver signed into law the New Jersey Wage Theft Act (the “Act”), P.L. 2019, c.212, modifying New Jersey’s existing wage and hour laws. Except for certain provisions dealing with criminal offenses, the Act took effect immediately upon enactment. The Act provides the following changes, in addition to others.

Six-Year Statute of Limitations: The Act extends the statute of limitations for actions under New Jersey’s wage and hour laws from two years to six years.

Treble Damages: The Act allows for an employee who prevails in an action against an employer for unpaid wages to recover the wages owed plus liquidated damages equal to 200% of the wages owed, costs and reasonable attorneys’ fees. A first-time offending employer can avoid paying liquidated damages if the employer acknowledges that it violated the law and pays the amount owed within 30 days of notice of the violation. The first-time offending employer must also show that (1) the violation was an inadvertent error made in good faith, and (2) the employer had reasonable grounds for believing its action was not a violation.

Presumption of Retaliation: If the employer terminates an employee for filing a wage complaint, the employer is required to offer reinstatement to the employee and take other actions as needed to correct the retaliatory action. If an employer takes any adverse action against an employee within 90 days of the employee filing a wage complaint, there is a presumption that the employer’s action was taken in retaliation against the employee. The presumption may only be rebutted by clear and convincing evidence that the action was taken for other, permissible, reasons.

Civil Penalties: In addition to any other damages owed, an employer found guilty of violating the Act will be fined $500 plus a penalty equal to 20% of any wages owed for a first offense, and $1,000 plus a penalty equal to 20% of any wages owed for subsequent offenses. There are additional administrative penalties ranging from $250 for a first violation to $500 for every subsequent violation. Clarification has not yet been provided as to whether these penalties will be waived for first-time offending employers if liquidated damages are avoided, as provided above.

Criminal Penalties: Employers found to have violated New Jersey’s wage laws may now be subject to criminal penalties under the Act. A violating employer commits a disorderly person’s offense for a first or second offense, and a crime of the fourth degree for a third or subsequent offense. Based on the number of violations, the employer must pay fines ranging from $500 (for a first offense) to $10,000 (for a third or subsequent offense) and/or serve jail time of 10 days (for a first offense) to 18 months (for a third or subsequent offense).

 

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