New Jersey (August 13, 2019) – The weather down the shore is not the only thing heating up in the Garden State. New Jersey remains active on the legislative front with respect to laws impacting all employers active in the state. We discuss below several recent developments.
New Wage Theft Law Dramatically Changes Legal Landscape
On August 6, 2019, New Jersey adopted the Wage Theft Act (WTA), which is effective immediately. Among other provisions, the WTA enables employees to recover liquidated damages and makes client-employers and labor contractors jointly and severally liable for violations, including retaliation.
Among the important changes are the following:
- There is now a rebuttable presumption against employers who fail to maintain records required by law or take adverse action against employees who have complained about wage and hour violations.
- Employees can recover liquidated damages of up to 200% of the wages owed. First-time offenders can avoid liquidated damages by demonstrating 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, but only if the employer admits to a violation and pays the full amount owed within 30 days of receiving notice of the violation.
- Employers may be required to offer reinstatement to employees terminated due to retaliation.
- The statute of limitations is extended from two years to six years for wage and hour violations.
- There is a rebuttable presumption of successor liability. An employer will be deemed to have established a successor entity if the predecessor and alleged successor share at least two of the following: perform similar work within the same geographical area; occupy the same premises; have the same telephone or fax number; have the same email address or website; employ substantially the same work force, administrative employees, or both; utilize the same tools, facilities, or equipment; employ or engage the services of any person or persons involved in the direction or control of the other; or list substantially the same work experience.
- Employers can be fined for violations, as well as imprisoned.
- The Wage Collection Section (WCS) of the New Jersey Department of Labor and Workforce Development (DOL), which had been empowered to investigate State Wage and Hour Laws claims of up to $30,000, may now investigate claims of up to $50,000.
- When the WCS finds an employer liable for wages or damages, the employer must pay within 10 days of the determination.
- Employers must provide to each current and newly hired employee a notice of employee rights under the State Wage and Hour Laws including an explanation of how to file claims. The DOL will be preparing a model notice.
Salary Inquiries Are Now Largely Prohibited in Connection with Job Searches
Effective January 1, 2020, New Jersey will join several other states and municipalities in barring employers from screening job applicants (not including internal candidates for promotions or lateral transfers) based on the applicant's prior salary history, which includes prior wages, salary, or benefits. There are exceptions which employers should make note of. Specifically:
- Employers which use multi-state employment applications that include operations outside of New Jersey are permitted to retain salary history questions, provided that the employer adds a disclaimer that instructs applicants for New Jersey positions not to answer the question.
- Applicants remain free to voluntarily disclose salary history. If they do so, the employer is permitted to verify the accuracy of the information and use it to determine the applicant's compensation if an offer is being extended.
- After an employment offer is extended that includes advice about the compensation package being offered, the employer may ask the applicant to confirm his or her salary history.
- A disclosure of salary history by the employer's outside background check vendor will not violate the law if the employer has cautioned the vendor not to disclose that information.
- Employers may inquire about the terms and conditions of the applicant's prior employer's incentive compensation plan when interviewing for positions that include incentive or commission pay, but it may not ask about the specific amounts paid by the prior employer.
- In addition, the law bars employers from requiring that an applicant's salary history satisfy any minimum or maximum threshold. Finally, employment agencies can ask applicants for compensation information, but the agencies can only pass that information along to the employer if the applicant gives written consent.
Employers have strong incentive to comply based on the availability of a private right of action for damages and attorneys' fees as well as civil penalties from $1,000-$10,000 per violation. Employers who have had the unfortunate experience of litigating employment discrimination claims in New Jersey Superior Court well know that it is advisable to take pains to avoid a return trip to the courthouse. All others should heed this word to the wise.
Compassionate Use Medical Marijuana Act Impacts Employers
New Jersey has adopted an amended statute governing medical marijuana use and regulation which contains provisions that bear on medical marijuana use by employees and applicants. The law bars taking any adverse action against employees and applicants based on their off-premises and non-working hour consumption when it is "based solely on the employee's status as a medical marijuana user." It does not require employers to permit marijuana use in the workplace, and it also permits employers to take adverse action based on employee use or possession of intoxicating substances during work hours or at the workplace outside of working hours. There is a carve-out under which the employer may take adverse action against a medical marijuana user if accommodating such use would violate federal law or result in the loss of a federal contract or federal funding. That is important since federal law continues to impose blanket restrictions on the sale and use of marijuana.
The law provides new mandatory procedures to be used when employees or applicants test positive for marijuana. The employer must provide written notice of the positive test result and provide an opportunity for the individual to provide a legitimate medical explanation for the positive result. Within three working days of the individual's receipt of the written notice, he or she can provide the reason or request retesting at his or her expense.
Employers should be careful in considering terminations or rejections of applications based on the rationale that the contemplated adverse action is predicated solely on the positive test result. The plaintiffs' bar is skilled at conjuring additional criteria claimed to have been in play as a basis to challenge what should be non-actionable employer action.
Notably in the same regard, the New Jersey Appellate Division had recently held that the New Jersey Law Against Discrimination may require employers to accommodate medical marijuana use for treatment of an employee's disability. See Wild v. Carriage Funeral Holdings, Inc., 458 N.J. Super. 416 (App. Div. 2019). In light of this ruling, medical marijuana users may have two different statutes on which to rely if subjected to adverse action.
New Jersey Requires Employers to Provide Pretax Transportation Fringe Benefits
New Jersey has apparently become the first state to require certain employers to provide pretax transportation fringe benefits to employees. Specifically, every employer which has at least 20 employees is required to offer all employees the opportunity to utilize a pretax transportation fringe benefit. Note that the employee head count permits excluding employees covered by a collective bargaining agreement. Employers must offer the benefit to all employees who are covered by the State Unemployment Insurance Code.
The commissioner of the DOL is responsible for compliance and can issue fines against employers who fail to provide the required benefits.
Paid Family Leave Amendments
Finally, we previously advised on amendments to the Paid Family and Medical Leave and Temporary Disability Laws. One such important change was effective June 30 of this year. It expands the number of covered employees under the Family Leave Act. It now applies to all employers with at least 30 employees during each working day in the 20 or more calendar workweeks in the current or prior calendar year.
Needless to say, it would behoove all New Jersey employers to revisit their handbooks, policies and practices in light of the panoply of new legal requirements. Lewis Brisbois' Employment Law team is available to assist employers in navigating these new requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.