Gibbons Law Alert

Gibbons Law Alert

Tagged: Wage Payment

NJ Supreme Court Holds That Sales Commissions Are “Wages” Under the Wage Payment Law

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Posted in Wage and Hour

On March 26, 2025

Introduction In Musker v. Suuchi, Inc. (decided March 19, 2025), the New Jersey Supreme Court held that compensation earned by employees via sales commissions constitute “wages” for purposes of New Jersey’s Wage Payment Law (“the WPL”). The court rejected the contention that sales commissions may qualify as “supplementary incentives” rather than “wages.” The distinction between the two concepts is critical because an employer’s failure to timely pay “wages” exposes the employer to administrative fines and penalties (N.J.S.A. § 34:11-4.10a-b) and, under the Wage Theft Act, entitles employees to assert claims not only for the withheld compensation but also for liquidated damages of up to 200 percent and for counsel fees (N.J.S.A. § 34:11-4.10c). Background Rosalyn Musker was employed as a salesperson for Suuchi, Inc., which sold software subscriptions to apparel manufacturers. In addition to an annual salary, Musker earned commissions based on the volume of her sales. At the onset of the COVID-19 pandemic, Suuchi began to sell Personal Protective Equipment (PPE) under a commission plan that differed from its usual commission structure. Subsequently, a dispute arose between Musker and Suuchi over her PPE commissions, with Musker maintaining that those commissions should have been calculated based on a gross sales basis and constituted “wages” under the WPL, and Suuchi maintaining that it properly calculated her...

Pay Equity Compliance Front and Center in New Jersey Department of Labor’s Proposed Regulations for the Temporary Workers Bill of Rights

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Posted in Employee Benefits

On August 31, 2023

The New Jersey Department of Labor recently issued proposed regulations for the Temporary Workers Bill of Rights (TWBR). The proposed regulations include new definitions and further guidance for employers to comply with TWBR’s pay equity requirements. The proposed regulations are open for public comment until October 20, 2023. By way of background, the TWBR, which became fully effective on August 5, 2023, seeks to protect more than 127,000 temporary workers working in the state and employed through a temporary help service firm in designated occupations, including protective services; food preparation and serving; building and grounds cleaning and maintenance; personal service and care; construction labor, helpers, and trades; installation, maintenance, and repair; production; and transportation and material moving. The TWBR, among other things, implements detailed wage notice requirements to be provided to temporary workers in both English and the temporary worker’s primary language, recordkeeping requirements, advanced notice for changes to temporary worker schedules, pay equity, and anti-retaliation rights with a rebuttable presumption for any disciplinary action taken within 90 days of a temporary worker’s exercise of those rights. The goal of the TWBR is to strengthen employment protections for temporary workers in these designated occupations, and employers need to be mindful of the TWBR’s requirements for compliance purposes. The TWBR’s pay equity component requires temporary workers...

New Jersey Enacts Three Laws with Enhanced Penalties for Employer Misclassification

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Posted in Wage and Hour

On July 20, 2021

On July 8, 2021, Governor Murphy signed into law three bills that amend the Worker Misclassification Package signed into law in January 2020 and intensify penalties against employers that misclassify workers. As employment practitioners across the state will recall, the Misclassification Package signed into law in January 2020 consists of a number of laws that grant the Commissioner of Labor and Workforce Development (“Commissioner”) the power to assess penalties against any employer that misclassifies its employees and to issue stop-work orders at the location where any state wage, benefit, or employment tax law violation is found. The laws included in the previously enacted Misclassification Package also allow the New Jersey Department of Labor (NJDOL) to post on its website a list of employers who have been found to misclassify their workers and to create joint liability for employers and staffing agencies for violations of state wage and hour laws. For a more detailed look at the Misclassification Package, see here.

New Jersey Supreme Court Confirms Enforceability of Arbitration Agreements Concerning Transportation Workers Under the NJAA

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Posted in Alternative Dispute Resolution / Employment Agreements

On September 24, 2020

In Colon v. Strategic Delivery Solutions, LLC and Arafa v. Health Express. Corp., plaintiffs contracted with corporate defendants to provide transportation and delivery services as independent contractors and signed arbitration agreements governing the terms and conditions under which they were to provide services. The agreements at issue explicitly referenced the Federal Arbitration Act (“FAA”), but neither referenced the New Jersey Arbitration Act (“NJAA”). In both cases, plaintiffs brought claims in New Jersey Superior Court asserting they were misclassified as independent contractors and alleging violations of wage payment and wage hour laws, and in both cases, defendants sought to compel arbitration and dismiss the lawsuits. Both trial courts granted the respective employers’ motions to dismiss the claims and compel arbitration, and plaintiffs appealed these decision to the Appellate Division of the New Jersey Superior Court. As detailed in a prior blog post, in June 2019, different panels of the Appellate Division issued divergent holdings concerning the appeals. The Colon panel observed that both the FAA and NJAA “favor arbitration” as a way to resolve disputes, and that the NJAA “governs all agreements to arbitrate” entered into on or after January 1, 2003 (with limited exceptions that did not apply). It further found that the FAA “does not occupy the entire field of arbitration” and, therefore, the...

New Jersey Division on Civil Rights Issues Guidance on the Diane B. Allen Equal Pay Act

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Posted in Discrimination

On March 12, 2020

On March 2, 2020, the New Jersey Division on Civil Rights (“DCR”) issued a Guidance Memorandum on the Diane B. Allen Equal Pay Act (“the Act”), which took effect in July 2018 and is widely considered to be one of the most employee-protective equal pay laws in the nation. In a statement made on the day of the Guidance Memorandum’s (“guidelines”) release, New Jersey Governor Phil Murphy reaffirmed his administration’s intention to eliminate discriminatory pay practices throughout the State that have historically prevented women and other minority groups from earning equal pay. The guidelines include a legal overview, with specific attention paid to the Act’s changes to the New Jersey Law Against Discrimination (“LAD”), and provide answers to Frequently Asked Questions (“FAQs”). The first section of the guidelines offer an overview of the Act’s main provisions and provide details on how the Act modifies the LAD. As a refresher, the overview outlines the DCR’s position as to the five most important provisions of the Act: Expanded Remedies for Pay Discrimination: The Act amended the LAD to implement a six-year “lookback” period which allows employees who prove pay discrimination to recover up to six years of back pay if the discrimination was continuous and a violation occurred within the LAD’s two-year statute of limitations. The Act...

The Third Circuit Rules That Philadelphia’s Salary History Ban Is Constitutional

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Posted in Discrimination

On February 12, 2020

On February 6, 2020, the Third Circuit Court of Appeals ruled that a Philadelphia law that prohibits employers from asking job applicants about their salary history is constitutional, lifting the injunction the United States District Court for the Eastern District of Pennsylvania (“District Court”) imposed on certain provisions of the law. The legislation at issue, the Wage Equity Ordinance (“Ordinance” or “law”) aims to address the historic wage gaps that affect women and minorities by encouraging employers to base salary offers on prospective job responsibilities rather than an applicant’s prior wages. The Ordinance was signed into law by Philadelphia Mayor Jim Kenney in January 2017, and was set to take effect in May 2017. The law contains two key provisions: (1) the “inquiry provision,” which makes it unlawful for Philadelphia employers and employment agencies (collectively “employers”) to inquire into an applicant’s wage and benefit history; and (2) the “reliance provision,” which makes it unlawful for employers to rely on an applicant’s wage history to determine future wages. The law also prevents employers from retaliating against any candidate who does not respond to a wage inquiry. The law does not prohibit a prospective employee from voluntarily disclosing compensation history; nor, are employers prohibited from inquiring with respect to compensation expectations. In April 2017, before the law...

New Jersey’s Misclassification Package Creates More Protections for Workers

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Posted in Wage and Hour

On February 11, 2020

On January 20, 2020, New Jersey Governor Phil Murphy signed into law six bills geared toward protecting self-employed workers. The “Misclassification Package” to which the new laws are referred, expands the Department of Labor (DOL)’s compliance and enforcement tools, and creates new penalties for employers that misclassify their workers as independent contractors instead of employees. This new legislation has been enacted in the wake of a recommendation from the Task Force on Employee Misclassification, which was established by an executive order signed by Governor Murphy in May 2018. The Misclassification Package includes the following laws, which are summarized below. A5838 – Stop-Work Orders. Pursuant to A5838, the DOL Commissioner is authorized to issue stop-work orders against employers where any State wage, benefit or employment tax law violation is found pursuant to an audit or investigation. Procedurally, the Commissioner is required to serve notice of intent to issue the stop-work order at least seven days before the order is issued. Once in effect, the stop-work order requires cessation of all business operations, and remains in effect until the Commissioner determines that the employer has come into compliance and has paid any penalties, or the Commissioner finds in a hearing that the employer did not commit the act on which the order was based. Employers that operate...

New Jersey Appellate Panels Disagree on Enforceability of Arbitration Agreements Concerning Transportation Workers

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Posted in Alternative Dispute Resolution

On July 1, 2019

On June 4 and June 5, 2019, separate panels of the Appellate Division of the New Jersey Superior Court issued diametrically opposed decisions calling into question the enforceability of arbitration agreements involving employees and independent contractors who provide transportation services. In Colon v. Strategic Delivery Solutions, LLC and Arafa v. Health Express Corporation, two Appellate Division panels considered the same legal question: are arbitration agreements enforceable under New Jersey law where one of the signatories is exempt from arbitration under the Federal Arbitration Act (FAA)? Despite the uniformity of the issue considered, the respective holdings stand in stark contrast to one another, creating confusion as to how to interpret arbitration agreements moving forward. Colon and Arafa involved strikingly similar facts. Both the Colon and Arafa plaintiffs contracted with the respective corporate defendants to provide transportation and delivery services on their behalf with regard to pharmaceutical products. Both defendants classified the plaintiffs as independent contractors; and both plaintiffs executed arbitration agreements governing the terms and conditions under which they were to provide transportation services. Most significantly, in both cases the arbitration agreements at issue explicitly stated that they were to be governed pursuant to the FAA (The Arafa agreement stated that it “is governed by the Federal Arbitration Act,” while the Colon agreement stated that the...

New York Employers Fall Review

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Posted in Policies and Handbooks

On September 6, 2018

In 2018, employers in New York encountered several important changes, including in the areas of anti-harassment and scheduling, warranting a Fall review of current employment practices and preparation for next year’s developments. Employers should take the time now to review current practices and prepare for the imminent future. NEW YORK CITY’S TEMPORARY SCHEDULE CHANGE LAW New York City’s Temporary Schedule Change Law (“TSC Law”) became effective July 18, 2018, and requires private employers to provide eligible employees with an allowance of a “temporary change” to their usual work schedule for certain qualifying “personal events” for up to two occasions per year (i.e., one business day twice per year or two business days on one occasion). Eligible employees are those who work at least 80 hours a year in New York City and have been employed by their employer for 120 or more days, with limited exceptions, including employees covered by collective bargaining agreements waiving the law. Temporary schedule changes may include paid time off, use of short-term unpaid leave, permission to work remotely, or working hour swaps or shifts. Qualifying “personal events” include: (a) an employee’s need to: (i) care for a minor child or care recipient (i.e., a person with a disability who is a family or household member and relies on the employee...

Third Circuit Affirms that Short Breaks, Treated as Flex Time, are Compensable

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Posted in Wage and Hour

On October 27, 2017

On October 13, 2017, the Third Circuit held in Secretary United States Department of Labor v. American Future Systems, Inc., that under the Fair Labor Standards Act (FLSA), an employer was required to compensate employees for all breaks of twenty minutes or less that the employer treated as flex time for the employees. Facts and Analysis Defendant American Future Systems, d/b/a Progressive Business Publications (“Progressive”) employed sales representatives to sell its business publications. The sales representatives were paid on an hourly basis, but only when logged onto their computers. In 2009, Progressive eliminated its policy that permitted employees to take two 15 minute paid breaks per day and replaced it with a “flexible time” policy. The flexible time policy allowed sales representatives to “log-off the computer system at any time of the day, for any reason, and for any length of time, at which point, if they so choose, they may leave the office.” Employees were required to log off their computers if they were “not on an active sales call, recording the results of a call, engaged in training or administrative activities, or engaged in other activities that Progressive considers to be work-related.” If sales representatives were logged out of their computers for over 90 seconds, they were not compensated for this flexible time....

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