Articles Posted in Wage and Hour Disputes

Employees are entitled to pay for the work they perform for their employers. An employer that fails to pay an employee what they have earned could face significant penalties under New Jersey employment law. The New Jersey Wage Payment Law (NJWPL) imposes civil penalties on employers for violating its provisions. Employees may also bring civil lawsuits under the NJWPL to recover the amount of pay their employers owe them, plus additional liquidated damages. The wage law defines “wages” to include numerous forms of payment. The New Jersey Supreme Court recently ruled in favor of an employee in a claim under the NJWPL. The dispute involved whether commissions based on performance count as “wages” when an employee also receives a base salary. The court’s ruling provides an employee-friendly definition of “wages.”

The NJWPL defines “wages” as money paid to an employee for their “labor or services…on a time, task, piece, or commission basis.” It excludes “supplementary incentives and bonuses” that are not part of an employee’s “regular wages.”

Employers must pay wages at least twice a month for most employees. Each payment must be for the full amount the employee has earned up to that point, with exceptions for certain withholdings like payroll taxes, health insurance premiums, and retirement plan contributions. An employee can file suit to recover unpaid wages. The NJWPL allows them to claim 200 percent of the amount owed as liquidated damages, plus attorney’s fees and court costs.
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Employers must pay hourly employees for all the time they are on the job. This is not limited to the time they are at their workstation and actively engaged in their job duties. New Jersey employment law requires employers to pay workers for time spent on other required tasks. Unpaid time spent changing into and out of work uniforms, for example, is a common basis for wage claims under state law and the federal Fair Labor Standards Act (FLSA). The Third Circuit Court of Appeals, whose jurisdiction includes New Jersey, recently ruled in favor of the U.S. Department of Labor (DOL) in a wage lawsuit. The DOL filed suit on behalf of a group of home healthcare workers. The employer was not paying them for the time they spent traveling between clients’ homes. The court found that this was a “willful violation” of the FLSA.

The FLSA states that employers must pay all non-exempt employees a minimum wage of $7.25 per hour. Non-exempt employees are also entitled to time-and-a-half for overtime hours — if an employee receives $10 per hour for a forty-hour workweek, they should receive $15 per hour for hours over forty in a week.

Employers may violate the FLSA when they do not pay employees for all the hours they are at work. DOL regulations state that employees are entitled to wages for any time spent “on duty.” The rule uses the example of a “fireman who plays checkers while waiting for alarms.” They are not “working,” but they are also not free to do as they please. When employers do not pay employees for all the time they are on duty, an employee’s actual hourly rate may fall below the minimum wage. Their total hours worked may exceed forty hours in a week, entitling them to overtime pay.
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Federal and New Jersey employment laws protect many workers’ right to receive overtime pay when working more than forty hours a week. The federal Fair Labor Standards Act (FLSA) provides overtime pay at a time-and-a-half rate. It exempts certain categories of workers, including “executive, administrative, and professional” (EAP) employees. The U.S. Department of Labor (DOL) issued a revised rule earlier this year that modified the criteria for the EAP exemption. The result is that fewer people are exempt from minimum wage and overtime under the FLSA. Lawsuits soon followed. A U.S. district judge recently struck the new overtime rule down. While his initial ruling only applied to the State of Texas as an employer, a subsequent ruling purports to strike the rule down nationwide, including New Jersey.

The FLSA uses broad language in many parts, leaving it to the DOL to work out the details. This includes the precise meanings of “executive, administrative, and professional” jobs. The DOL defines them based on factors like job duties and payment of a salary instead of hourly wages. It sets a threshold salary amount, above which a person falls under the EAP exemption. The new rule increased this threshold amount from $684 to $844 per week, or from $35,568 to $43,888 annually, as of July 1.

The rule sets another increase on January 1, 2025. Beginning on January 1, 2027, the threshold amount increases every three years based on current economic data. Two lawsuits in the Eastern District of Texas followed the publication of the DOL’s rule. Plaintiffs included the State of Texas and various business associations.
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Employees who are not exempt from overtime rules are entitled to a greater pay rate for any hours they work over forty in a week. Federal and New Jersey employment laws protect this right and impose penalties and legal liability on employers who fail to pay overtime rates to their employees. Under the federal Fair Labor Standards Act (FLSA), an employer may be liable to employees for double the amount of unpaid overtime. The statute allows an employee to bring a lawsuit on behalf of themselves and other employees in similar circumstances. A group of retail employees recently settled a lawsuit that alleged overtime violations under the FLSA and state law. As part of the settlement, the defendant agreed to pay $1.25 million in damages.

The FLSA requires employers to pay time-and-a-half to non-exempt employees for overtime work. Generally speaking, overtime hours begin once an employee has worked forty hours. The statute uses the term “workweek,” but does not provide a definition. Employers may vary on how they define the term, although a workweek must consist of seven days. A workweek typically goes from Monday to Sunday or Sunday to Saturday. If an employee works forty-five hours during the period that the employer considers a workweek, the employer must pay them the overtime rate for five hours.

Section 16(b) of the FLSA allows employees to bring collective actions for “other employees similarly situated.” A collective action under the FLSA is similar to a class action in many ways. It allows multiple employees with similar claims to pool their claims, which can make asserting their rights more efficient. One important difference is that FLSA collective actions are strictly “opt-in.” Some class actions automatically include all parties who meet the criteria for the class unless they opt out of class membership. For an FLSA collective action, potential plaintiffs must give written consent to be part of the lawsuit.
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