New Jersey Employment Legisislation

Pay Equity, Family and Earned Sick Leave, Minimum Wage, Salary History, Wage Theft Measures Signed Into Law

Updated March 4, 2020

Several important bills affecting New Jersey employers of all sizes, including non-profits, have been signed into law, regarding  pay equity, earned sick leave, the minimum wage, and more.  The most recent legislation to be enacted is a wage theft measure which increases the penalties for the failure to pay wages such as the minimum wage, overtime, or tips, as required by law. Our friends at Pro Bono Partnership have prepared detailed summaries of many of the measures that have been enacted; links to those resources in their respective sections.

Non-profit employers should make a priority of updating their employment policies and practices in order to ensure compliance with the law.

Pay Equity

The Diane B. Allen Equal Pay Act (P.L. 2018, c. 9) amends New Jersey’s Law Against Discrimination (LAD) to make it illegal for employers to discriminate in pay rates against an employee who is a member of a protected class. Under the new law, which takes effect July 1, 2018, employers will not be able to pay rates of compensation, including benefits, at less than the rate paid to employees not of the protected class for substantially similar work, when viewed as a composite of skill, effort and responsibility.  The bill allows employees to seek back pay for up to six years of violations, and each paycheck for which the pay is unlawfully unequal could be deemed a separate violation. An employer found guilty of violating the act could be liable for triple the damages incurred by the employee. Under the new law, employers may not ban or retaliate against employees who inquire about salary information from coworkers or former employees.  Employers also may not reduce the pay of more highly compensated employees in order to comply with the equal pay requirements.

While much emphasis has been placed the gender equality aspects of the new law, it should be noted that its provisions apply to any member of a protected class. Under New Jersey law, that currently includes:

• race, creed, color, national origin, ancestry
• age
• marital status, civil union status, domestic partnership status
• affectional or sexual orientation
• genetic information
• pregnancy or breastfeeding
• sex, gender identity or expression
• disability or atypical hereditary cellular or blood trait of any individual
• because of the liability for service in the Armed Forces of the United States or the nationality of any individual
• because of the refusal to submit to a genetic test or make available the results of a genetic test to an employer

For more information about the Diane B. Allen Equal Pay Act, see this summary from Pro Bono Partnership. Non-profits should take steps now to review their current salaries, employment manuals, pay scales, hiring and compensation practices, and other policies in order to resolve any potential inequities or risk exposures that might be revealed.

Earned Sick Leave

New Jersey’s earned sick leave law (P.L. 2018, c 10), took effect Monday, October 29, 2018. It requires nearly all employers of all sizes, including non-profits, to provide one hour of paid sick leave for every 30 hours an employee works, up to 40 hours of paid sick leave in any given year.  Among the few exclusions are public employers or public employees already covered under earned sick leave requirements under existing laws or regulations; construction employees covered under a collective bargaining agreement; and certain per diem health care workers.

Assuming they were not already eligible for paid leave equal to or more generous than the new law, employees can begin earning their sick leave the day the law takes effect and may start using their earned, accrued sick leave 120 days after. For employees whose employment begins after the act takes effect, they may take earned sick time 120 days after the start of employment. After the initial 120 days, an employee may use paid sick leave as soon as it is accrued. Employers are free to provide a shorter timeline.

Eligible uses for the use of earned sick time under the new law include:

• time needed for diagnosis, care, or treatment of, or recovery from, an employee’s mental or physical illness, injury or other adverse health condition, or for preventive medical care for the employee, or for the employee to aid or care for a family member under the similar circumstances;
• absence necessary due to circumstances resulting from the employee, or a family member of the employee, being a victim of domestic or sexual violence, (e.g., medical attention for physical or psychological reasons; to obtain services from a domestic violence organization; counseling; legal proceedings; etc.);
• time during which the employee is not able to work because of a closure of the employee’s workplace, or the school or place of care of a child of the employee, by order of a public official due to an epidemic or other public health emergency, or because of the issuance by a public health authority of a determination that the presence in the community of the employee, or a member of the employee’s family in need of care by the employee, would jeopardize the health of others; or
• time needed to attend a child’s school conferences or similar meetings requested by a teacher, school administrator or other professional for educational purposes, or to attend a meeting regarding care provided to the child in connection with the child’s health conditions or disability.

Employees will be permitted to carry over up to 40 hours of earned, unused sick time from one year to the next.

An employer will be deemed compliant with the earned sick leave requirements if it offers paid time off such as earned vacation, sick or personal time and allows employees to use this time for the above purposes.

The law imposes strict penalties on employers for noncompliance or for retaliation against an employee for using their earned sick time, and employers will be required to notify employees of their rights under the act.

Non-profits should examine their employment handbooks, policies, and procedures in order ensure that appropriate practices are in place. For more details, see this summary from Pro Bono Partnership.

Minimum Wage

On February 4, 2019, Governor Murphy signed legislation (P.L. 2019, c. 32) that will incrementally increase the minimum wage in New Jersey to $15 per hour by 2024. For most employers of six employees or more, the current minimum wage of $8.85 per hour will increase based on the following schedule:

• $10 per hour on July 1, 2019
• $11 per hour on January 1, 2020
• An additional $1 per hour each January 1 through January 1, 2024

After January 1, 2024, the minimum wage will be tied to the Consumer Price Index, with increases to take effect subsequent each year on January 1.

The law provides a slightly longer schedule for small employers (fewer than six employees) or seasonal workers, with the first increase, to $10.30 per hour, taking effect January 1, 2020. 

A complete schedule of rates and effective dates for different types of employers is available at https://www.nj.gov/labor/forms_pdfs/wagehour/mw-571.pdf.

For a more detailed description of the minimum wage changes and requirements, see this summary from Pro Bono Partnership.

Wage Theft

On August 6, 2019, Acting Governor Sheila Oliver signed legislation (P.L.2019, c.212) that will increase the penalties for employers who fail to pay wages as required under the state’s wage and hour laws. Under the “New Jersey Wage Theft Act,” employers who fail to pay the required minimum wage, overtime pay, tips, or pay for hours worked, could be subject to criminal and civil penalties. The law also provides protections for workers from retaliation by employers for filing complaints alleging wage and hour violations.

As summarized by the New Jersey Office of Legislative Services, the law:

assists workers aggrieved by certain violations of laws regarding the payment of wages by strengthening enforcement procedures, remedies and a variety of criminal, civil and administrative sanctions against the violators.

Upon conviction for a first violation of a wage payment law subject to the bill, an employer is punishable by a fine of not less than $500 nor more than $1,000 or by imprisonment for not less than 10 nor more than 90 days or by both the fine and imprisonment. Upon conviction for a second or subsequent violation, an employer is punishableby a fine of not less than $1,000 nor more than $2,000 or by imprisonment for not less than 10 nor more than 100 days or by both the fine and imprisonment.

Additionally, the [law] permits an aggrieved employee to bring a civil action, wherein a violator can be required to pay wages owed, plus liquidated damages equal to not more than 200 percentof the wages. However, payment of liquidated damages is not required for a first violation if the employer demonstrates that the action was taken in good faith andreasonable grounds for believing the action was not a violation of the bill, the employer admits the violation, and the employer pays the amount owed within 30 days. The [law] also provides that an employer who is found to have retaliated against an employee for bringing a claim under the statute commits a disorderly persons offense and is liable to the employee for wages lost because of the retaliation plus damages equal to not more than 200 percent of those wages. No payment of wages or damages pursuant to this [law] shall result in a violator paying wages owed or damages more than one time for the same violation.

Most of the provisions of the New Jersey Wage Theft Act take effect immediately. For additional details, see this guest blog by Maxine Neuhauser, Esq., and Michael D. Thompson, Esq., members of the law firm Epstein Becker Green, PC, in Newark.  The law firm Jackson Lewis, P.C. has also posted an analysis of the new law.

Family Leave Expansions Signed Into Law

On February 19, 2019, Governor Murphy signed legilsation to update and expand the requirements of the state’s family leave laws. P.L. 2019, c. 37 makes a series of changes to the family leave statutes, including:

• Applying the law’s requirements to employers with 30 or more employees (reduced trom 50 under current law) as of June 30, 2019;
• Expanding the number of weeks available for leave from six to twelve, and allowing leave to be taken intermittently over a 12-month period;
• Increasing the weekly benefit payment for all forms of temporary disability leave, including paid family leave;
• EExpanding the definition of “family member” to include a broader array of relationships in order to allow employees to take leave under a wider set of circumstances.

The legislation will be funded through an increase to employee contributions.

For more information, see this summary from Pro Bono Partnership.

Ban on Salary History Inquiries of Job Applicants Effective January 1, 2020

Legislation that prohibits employers from asking job applicants about their salary history was signed into law by Acting Governor Sheila Oliver on July 25, 2019. P.L. 2019, c. 199  (N.J.S.A. 34B-20) makes it unlawful for an employer to:

• screen a job applicant based on the applicant’s salary history, including, but not limited to, the applicant’s prior wages, salaries or benefits; or
• require that the applicant’s salary history satisfy any minimum or maximum criteria. 

An applicant may voluntarily, without any prompting or coercion, volunteer the information or provide written authorization for an employer to obtain it, to an employer, but their candidacy cannot be adversely affected if they do not do so. If a candidate does provide this information voluntarily, an employer may consider it in determining salary, benefits or other compensation for the applicant.

An employer is permitted to request salary history after an offer of employment, including explanation of compensation package, has been made.

Employers are permitted to obtain, or verify a job applicant’s disclosure of, non-salary related information when conducting a background check on the job applicant but need to specify that salary history is not to be disclosed when requesting information for the background check. If an employer still receives salary information as part of the response to the inquiry, the salary information should not be retained and should not be considered when determining the compensation or benefits of the applicant. 

Additional provisions and exclusions pertain to employer inquiries regarding an applicant’s previous experience with incentive and commission plans and the terms and conditions of the plans under certain circumstances.

The law does not apply to applications for internal transfer or promotion with an employee’s current employer, or an employer’s use of prior knowledge based on an employee’s prior employment with the employer. It also excludes actions taken by an employer pursuant to any federal law or regulation that expressly requires the disclosure or verification of salary history for employment purposes or requires knowledge of salary history to determine an employee’s compensation.

The law is designed to rectify wage disparities that can adversely affect a variety of classes of workers.   These disparities can be exacerbated if employers base pay on an already-depressed compensation scale.  

This legislation took effect on January 1, 2020 (the first day of the sixth month following enactment).

Revisions to Plant Closing Law Require Automatic Severance in Cases of Mass Layoffs

Legislation signed by Governor Murphy will make several significant changes to New Jersey’s existing law which governs notification and severance requirements for employees in cases of mass layoffs or facility/organization closure. As reported by Epstein Becker Green:

Once effective, the amended NJ WARN Act (the “Law”) will not only require 90 days’ advance notice of mass layoffs or of a transfer or termination of operations—rather than the current 60 days’ notice—but most significantly, New Jersey will now be the first state in the nation to mandate statutory severance pay for all employees who lose their job in a WARN event such as a “mass layoff.”

The updated law applies to employers, including non-profits, with 100 or more employees (amended from 100 full-time employees in the previous statute). The revision was prompted by some high-profile corporate bankruptcies which left workers unprotected while often providing high payments to key executives. Consequently, the law also includes language that appears to hold organization executives and managers personally and financially responsible for the severance payments in the event of a closure or mass layoff.

As noted above, non-profits with 100 or more employees (full- or part-time) are covered under the new law. It also makes no exceptions for situations like the loss of a government contract, late government payments or frozen government funds, natural disasters, terrorist attacks, or similar circumstances that are well beyond an organization’s control.

For more details regarding the updated WARN law, see this summary from Epstein Becker Green.

The law is scheduled to take effect July 19, 2020.

The sponsors of this legislation are aware of concerns and are working to develop a “clean-up” bill to address some of the issues prior to the effective date. The Center for Non-Profits is actively seeking amendments to allieviate the unintended consequences. Please contact us for more information.

Reminder: Information on this website does not constitute legal advice or a legal opinion. For answers to specific questions concerning your situation, you should consult a knowledgeable attorney who can advise you regarding your particular circumstances.

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