Unpaid Wages and Overtime? Know Your Rights Under New Jersey’s Wage Theft Act

New Jersey’s minimum wage has been steadily rising and, thanks to legislation signed by Governor Murphy in early 2019, is scheduled to reach 15 dollars an hour by 2024.  But perhaps the better news for employees is that New Jersey just passed increased protections for workers seeking unpaid wages and overtime.

The Wage Theft Act (“WTA”) was signed into law in August of 2019.  It gives employees substantially more legal recourse for securing lost wages, and imposes substantially stricter penalties upon employers found in violation of the law.  The following is a quick, general summation of what the WTA means for employees:

You now have six (6) years in which to file a lawsuit for unpaid wages and overtime 

Previously, workers who sued to recover wages/overtime were subject to a two-year statute of limitations under the New Jersey Wage and Hour Laws.  The WTA increases the statute of limitations to six years. However, determining exactly when the six year statutory period starts running can sometimes be tricky; for that reason, you should check with an attorney to confirm whether any potential lawsuit is within the tolling period.

Your employer is now subject to enhanced civil and criminal penalties, including liquidated damages of to 200% 

The New Jersey Wage and Hour Laws make it illegal for your employer to knowingly withhold wages and overtime pay from you.  They also make it illegal for your employer to retaliate against you if you (1) make a direct complaint to your employer or to the Department of Labor regarding unpaid wages/overtime; (2) testify or plan to testify in a proceeding relating to the Wage and Hour Laws (including a lawsuit); or inform another employee about his/her rights under the Wage and Hour Laws.

The WTA, however, gives these prohibition some legal “bite” in the form of civil and criminal fines and penalties.  For example, employers found in violation of the Wage and Hour Laws for the first time may be subject to civil fines of $500 plus 20% of the amount owed the employee, in addition to administrative penalties.  Moreover, first-time violators are deemed guilty of a criminal disorderly persons offense, punishable by a $500-$1,000 fine or by 10-90 days in prison (or both!).  These fines and penalties climb fairly steeply with successive offenses.

Most importantly, employees will be interested to know that employers found in violation of the Wage and Hour Laws may have to pay liquidated damages equal to 200 percent of the wages/overtime owed to the employee, as well as the employee’s costs and attorney fees.  Before the WTA, liquidated damages were unavailable in wage and hour actions, so this represents a new and potentially large form of recovery for employees.

The catch: An employer has a defense against liquidated damages if it is a first-time violator and can prove, among other things, that its withholding of wages was an “inadvertent error made in good faith.”  Exactly how an employer can meet such a burden of proof will likely be played out in the courts in the coming years.

Under certain conditions, the law presumes your employer retaliated against you 

The WTA provides that any employer that takes an adverse employment action against an employee within 90 days of the employee’s filing a wage complaint is automatically presumed to have retaliated against the employee in violation of the law.  

This means that if you are fired, disciplined, demoted, or otherwise adversely impacted by your employer 90 days after you file a wage and hour complaint with a court or the Department of Labor, then you do not have the burden of proving your employer retaliated against you – instead, the WTA assumes it happened.  The only way your employer can rebut this presumption of retaliation is by “clear and convincing evidence that the action was taken for other, permissible reasons.” 

Again, exactly what such “clear and convincing evidence” is sufficient to reverse the presumption of retaliation will have to be settled by the courts.  However, from a common-sense standpoint, evidence of unexcused absences, insubordination, or similar conduct that undermines the functioning of the employer’s business would likely suffice.

Finally, if you are fired within the 90-day window, and your employer is unable to rebut the presumption of retaliation, the WTA requires your employer to offer to reinstate you, unless this is prohibited by law.

If you’re a contract employee, your labor contractor and your client employer share liability 

Many hourly employees are hired out by labor contractors to work on jobs on behalf of the contractor’s clients (for example, an IT consulting agency supplies computer programmers to work on a software roll-out for its client bank).  The WTA makes clear that if pay withholding occurs in these situations, the contractor and the client are jointly and severally liable for the monies owed (plus penalties, fines, and/or liquidated damages).

There are many additional changes enacted by the WTA not covered in this article.  If you believe your employer has withheld wages, overtime and/or benefits to which you are entitled, call our offices today for a free consultation.

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