Being An Employer in New Jersey Just Got Harder: Introducing the New Jersey Wage Theft Act
When it comes to employment laws, New Jersey has long been considered one of the more employee friendly states in the country. Seeking to solidify its employee friendly status, on August 6, 2019, New Jersey formally enacted the New Jersey Wage Theft Act (“WTA”). The law triples(!!!) the statute of limitations for wage claims and drastically increases damages available to employees who have not been paid properly.
The important points every employer needs to know are:
1) The statute of limitations for wages claims is now 6 years. You must now retain wage and hour records (payroll records/timesheets) for six years! If an employer fails to maintain sufficient time keeping records, there is an automatic presumption that the employee worked for the period of time claimed by the employee and for the amount of wages alleged in the wage claim. In other words, if you don’t have the records to refute the employee’s claim, the assumption is the employee’s claim is true and they can potentially recover six years’ worth of wages.
2) Failure to properly pay wages results in an employer having to pay liquidated damages equal to 200% of the claim. For example, a failure to pay $100 in wages will cause the employer to owe $300 ($100 compensatory damages + $200 liquidated damages). In addition, the employer will be liable for legal fees and costs incurred by the employee in bringing the claim. On the bright side, there is a provision that allows an employer to possibly escape such liability, though it only applies to first time offenders and requires the full amount owed be paid within 30 days of notice of the wage violation.
3) If an employee is terminated within 90 days of filing a complaint regarding unpaid wages, there will be a presumption that the employer’s action was taken in retaliation against the employee for bringing the wage related claim.