Hunton Employment & Labor Perspectives

On December 6, 2012, New Jersey Assembly Bill 3581 was introduced and referred to the Assembly Budget Committee.  The Bill would amend New Jersey’s current statute concerning enforcement, penalties and procedures for law regarding failure to pay wages and provide for enhanced penalties, among other things.  The Bill is part of the Assembly’s recent push to promote job creation and economic development through a series of legislative initiatives.

Incentives and Easy Access for Employees

The proposed legislation makes it easier for employees to seek relief against employers.  The Bill provides that an employee could file a citizen complaint alleging a violation directly with a municipal court.  A successful employee is entitled to the wages owed by the employer and liquidated damages equal to 100% of the wages owed.  Employees are also entitled to damages in the event that they are retaliated against by their employer for filing a complaint under the section.

Adding Pain to the Punishment for Employers

Refuting a wage claim may be more difficult for employers under the proposed legislation.  The Bill provides that a fact finder may infer that an employer has violated the statute as alleged if the employer fails to present legally-required employee records and there is sufficient evidence of a violation.  The Bill also creates a rebuttable presumption that a person earning less than two-thirds of the median hourly wage (as determined by the Department of Labor and Workforce Development) is an employee, not an independent contractor.

Employers found in violation would be subject to a fine of $500 plus a 20% penalty of the wages owed for a first offense and a $1,000 fine plus a 20% penalty of the wages owed for subsequent offenses.  These fines and penalties would be applied toward enforcement and administration costs of the Division of Wage and Hour Compliance.

The Assembly is expected to vote on the Bill and numerous others on December 17.

Wage Theft Legislation

The New Jersey legislation is similar to numerous other legislative initiatives across the country aimed at preventing “wage theft.”  These laws seek to make it easier for employees to bring claims against employers for wrongfully withheld or unpaid wages and enhance the penalties imposed on employers found in violation of the laws.  For example, in 2010, Maryland amended the definition of “wage” to include “overtime wages,” thereby entitling employees to recover, potentially, treble damages in the case of withheld overtime wages.  Just a few months ago, Broward County, Florida passed a law permitting employees meeting certain criteria and alleging a failure to pay wages in excess of $60 to seek redress before a county-appointed hearing officer and obtain back wages, an equal amount of damages, costs, and attorney fees if successful.