New Jersey Legislative Update: The Assembly “Wages” Campaign to Benefit Employees

On December 17, 2012, the New Jersey Assembly approved two pieces of wage-related legislation that each have the potential to significantly alter New Jersey State Labor Law.

Assembly Bill No. 3581 (Wage Withholding)

The bill strengthens the enforcement procedures and disorderly person sanctions against employers who fail to timely pay wages, compensation or benefits to their employees and makes it easier for employees to report such employer violations.

An employer found to have committed a violation is required to pay the wages owed plus liquidated damages equal to 100 percent of those wages. This is in addition to a $500 fine plus a 20 percent penalty of the wages owed in the case of a first offense or a $1000 fine plus a 20 percent penalty of the wages owed for subsequent offenses. “Employer” includes “any individual, partnership, association, joint stock company, trust, corporation, the administrator or executor of the estate of a deceased individual, or the receiver, trustee, or successor of any of the same, employing any person in [New Jersey].” Further, “the officers of a corporation and any agents having the management of such corporation” are considered the employers of the corporation’s employees.

Though the bill’s definition of “employee” excludes independent contractors and subcontractors, the bill includes a rebuttable presumption that an individual earning less than two thirds of the median hourly wage, as determined by the Department of Labor and Workforce Development, is an employee and not an independent contractor. The rebuttable presumption cannot be altered by contract nor does it alter any existing criteria for a determination of independent contractor status pursuant to State law.

Another noteworthy provision in the bill states that if an employer fails to present employee records as required by State law after an employee alleges a violation, a fact finder may infer that the employer employed the employee for the period of time and owes the amount of wages alleged in the complaint –unless the employer provides a reasonable excuse for the failure to present employee records.

The bill also imposes a disorderly persons offense on an employer who retaliates against an employee who filed a complaint under the statute and makes the employer liable to the employee for damages. The bill, approved in a 47-29 vote, now heads to the Senate.

Senate Committee Substitute for Senate Concurrent Resolution No. 1 (Minimum Wage Amendment)

Also on December 17, 2012, the Assembly passed a resolution that will ask New Jersey voters to authorize an amendment to the State Constitution that would increase the State’s minimum wage rate from $7.25 to $8.25 per hour and base future increases on the Consumer Price Index. Currently, a full-time employee working 40 hours per week and compensated at the minimum wage makes $15,080. Pursuant to the proposed amendment, that same worker will earn $17,160 per year for an increase of $2,080.

The resolution, which was passed in a 46-29-1 vote, would need to pass through both the Assembly and the Senate a second time before it could be placed on the ballot.

Employer Takeaway

As this year draws to a close, now is a good time for employers to revisit their employment record-keeping and wage-payment policies to ensure compliance with all statutory requirements.

We will continue to monitor the status of the proposed legislation and update our readers on future developments. In the interim, for answers to questions about how the proposed legislation may impact your business or  any  of your employment or labor law-related needs, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.

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