The State of New Jersey has passed several laws in the wage-hour area that are definitely pro-employee, to say the least. The latest effort on this front is something quite special, or onerous, depending on which side you are on. The brand new, effective immediately, New Jersey State Wage Theft Act (WTA) geometrically adds to the existing penalty structure for employers by adding a liquidated damages provision and gives extra protections for employee retaliation claims. The joint employer provisions have also been expanded; indeed, the new law states that any waiver of its “joint and several liability” section is void and against the law.”
There is now a rebuttable presumption against employers who do not maintain records mandated by law or who take disciplinary actions (e.g. firing) against workers who voice internal or external complaints. The law also increases the ceiling on wage claims that can be filed with the NJDOL Wage Collection Section (“Section”). The ceiling was $30,000—now it is $50,000. The Section can now also take jurisdiction over retaliation claims.
Importantly, the law also now, for the first time ever, imposes liquidated damages on employers who do not properly pay wages. These penalties, amazingly, can be to Two-hundred (200) percent of the wages owed. Just as amazingly, the statute of limitations has been extended from the current two years to six years (equal to that of New York).
The rebuttable presumption of retaliation kicks in should an employer fire/discipline a worker within ninety (90) days of his engaging in any conduct or actions protected under the new law. The employer must establish the bona fides of the adverse action under a stringent “clear and convincing evidence” standard and prove that the action was for a legitimate, business-based reason.
The penalties have also been stepped up. Now, it is $1,000 for a first violation (or imprisonment of 10 to 90 days); $1000-2000 for a second or subsequent violation (or imprisonment of 10 to 100 days). These penalties can be assessed, in theory, for every employee and for every week.
Significantly, a first-time offender can escape liquidated damages if that business can show that the violation was “an inadvertent error made in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation.” In order to maybe get that safe harbor, the Company must admit it violated the law and pay the entire amount owed in thirty (30) days.
Each employee must be give a WTA notice, whether incumbent or new hire. Interestingly, the notice must advise how a claim for wages can be filed.
This law is a quantum leap in terms of enforcement efforts. It also places (as did the NJ Equal Pay Act before it) a heavy burden on employers to prove they were right, e.g. motivated by legitimate business reasons. The threat of liquidated damages and the vast increase in penalty assessments that are possible really puts pressure on employers to settle cases/audits quickly, even if they believe they did nothing wrong.