Newark, N.J. (January 11, 2024) - 2023 saw several notable changes to the Garden State's labor and employment laws. The changes encompass employers' obligations to employees, employees' financial entitlements and, most notably, a push to hold employers accountable via a form of public shaming to ensure compliance with certain wage, benefit, and tax laws.
Expansion of Employee Rights and Protections in New Jersey
Protections for Service Employees New Jersey Governor Philip D. Murphy signed legislation establishing various employment protections for specific "service employees" during changes of ownership. The law defines a "service employee" as an individual "employed or assigned to a covered location on a full or part-time basis for at least 60 days and who is not a managerial or professional employee or regularly scheduled to work less than 16 hours per week . . ." in the following occupations: care or maintenance of a building or property, passenger-related security services, cargo-related and ramp services, in-terminal and passenger handling and cleaning services at an airport; or food preparation services at a primary or secondary school, or a tertiary educational institution. The new law applies only to certain "covered locations." Employers, publicly or privately owned, are encouraged to review the law to ascertain whether they are a "covered location."
Employers are required, before contracting out services it previously performed, or selling or transferring any property at which service employees work, to do the following 15 days before taking those actions: (1) request and obtain a list of the names and limited job information of each employee on the service contract; (2) provide written notice to any collective bargaining representative of the decision to terminate the service contract, enter into a new service contract, or sell or transfer the property; (3) ensure that a written notice is posted at the affected work site to all affected service employees describing the pending termination of the service contract, entry into a service contract, or sale or transfer of the property; and (4) provide the affected employees and their collective bargaining representative the name and address of any successor employer or the purchaser or transferee of the property.
This law also imposes obligations on the successor employer, which is required to provide an affected service employee a written offer of employment and send a copy to the employee's collective bargaining representative, if any, and to retain an affected service employee at a covered location for 60 days or until its service contract is terminated, whichever is earlier. A successor employer may retain less than all of the affected service employees during the 60-day transition period only if it: finds that fewer service employees are required to perform the work than the predecessor employer had employed; retains service employees by seniority within each job classification; maintains a preferential hiring list of those employees not retained; and hires any additional service employees from the list, in order of seniority, until all affected service employees have been offered employment.
Importantly, a successor employer may not discharge a service employee retained pursuant to this section without just cause during the 60-day transition period, except as provided for above. The law does not define what constitutes "just cause." The law does provide an "escape hatch" for employers. Specifically, if any successor employer, on or before the termination of the service contract, agrees to assume, and to be bound by, the collective bargaining agreement of the awarding authority or contractor, this law does not apply if the collective bargaining agreement provides terms and conditions for the discharge or laying off of employees.
A court may impose a maximum fine of $2,500 for a first violation, and up to $5,000 for each subsequent violation. Each week in which a violation occurs is a separate offense. This bill went into effect in October 2023.
Incentives to Comply with Wage and Hour Law The New Jersey Department of Labor and Workforce Development (DOL) took action to incentivize businesses to comply with all applicable laws. It launched The WALL—the Workplace Accountability in Labor List. The WALL lists companies that have outstanding liabilities to the state for violations of wage, benefits, and tax law. The DOL may only place companies on the list if a final order or judgment has been issued and 15 business days' notice has been given to the company. Within 20 calendar days after receiving this notice, a business is able to stop its name from being placed on the WALL by either paying all outstanding liabilities or by challenging its inclusion. Doing so will result in a hearing and an informal settlement conference. Additionally, businesses will be able to remove their names from the WALL if they subsequently pay off all outstanding liabilities. This can be a potent tool because businesses listed on the WALL are barred from engaging in public contracting.
Unemployment Benefits Changes New Jersey amended the law governing payment of unemployment benefits. Employers are now required to provide the Division of Employment with certain information, to be set forth by the Division in advance, immediately upon an individual's temporary or permanent separation from employment. When an employer provides benefit instructions to an individual disclosing the date on which unemployment will commence, the employer must immediately and simultaneously notify the Division, by electronic means. An employer which fails to make this disclosure will be liable for penalties.
Minimum Wage Increases Based on legislation signed in 2019 to gradually increase the state minimum wage, as of January 1, 2024, the minimum wage will increase to $15.13/hour statewide. After this increase, annual increases to the state minimum wage will be based on the consumer price index.
Minimum wage rates for some industries will change at different rates. Minimum wage for (i) agricultural employees will increase to $12.81/hour, (ii) long-term care facility staff will increase to $18.13/hour, and (iii) businesses with fewer than six employees will increase to $13.73/hour. Additionally, tipped workers will see their minimum wage stay the same at $5.26/hour, but if their wages plus tips do not equal $15.13/hour, then the employer must pay the difference.
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