Wage and Hour Disputes

September 21, 2023

U.S. Labor Department Revises Wage Requirements for Federal Contracts in New Jersey and Nationwide

The federal Davis-Bacon Act (DBA) of 1931 requires contractors to pay prevailing wages to all “mechanics or laborers” employed on certain federal public works projects. New Jersey employment law addresses prevailing wages for state projects. Failure to meet the prevailing wage requirements could result in termination of the contract and civil liability to workers. The Wage and Hour Division (WHD) of the U.S. Department of Labor is responsible for determining the prevailing wage for specific types of work in specified geographic areas. The current rule governing this process has been in place since 1983. The WHD published a new final rule in August 2023, which will replace the current rule on October 23. Among other changes, it expands the criteria that the WHD may consider when calculating prevailing wages.

The DBA defines “wages” to include hourly pay, medical benefits, worker’s compensation, pensions or retirement benefits, disability insurance, unemployment benefits, and other forms of compensation. “Prevailing wages” are based on several factors:
– The “class[] of laborers and mechanics” working on a project;
– The type of project; and
– The “civil subdivision of the State” — meaning the county — where the project is located.
Contractors and subcontractors working on federal contracts must pay workers every week at the worksite and post the wage scale somewhere where workers can see it.

Federal agencies may cancel a contract if the contracting officer discovers that the contractor is paying workers less than the applicable prevailing wage. The contractor may be liable for the costs incurred by the federal agency to complete the project. Since workers may find themselves out of a job in this situation, the DBA allows federal agencies to pay workers any wages owed to them directly out of withheld payments. If the agency does not have enough in the withheld funds to pay workers what they are owed, the DBA states that workers may file civil lawsuits against the contractor and its sureties.
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August 14, 2023

New Jersey Lawsuit Against Internet Company Alleges Employee Misclassification

by Resnick Law Group, P.C.

New Jersey guarantees a minimum wage for all non-exempt employees in the state. In order for an individual to claim a right to minimum wage, they must establish that they are, legally speaking, an “employee.” Some employers try to avoid this obligation by misclassifying employees as independent contractors. This type of practice is considered a minimum wage violation. The federal and state definitions of “employee” differ slightly from one another, but both are based on the extent to which an employer controls how an individual does their job. A lawsuit pending in a Newark federal court alleges misclassification of online workers under both federal and New Jersey employment laws.

New Jersey has developed a concise definition of “employment” for the purposes of determining whether an employer has misclassified an employee as an independent contractor. A court must presume that an individual is an employee unless the employer can establish all three of the following elements:
A. The employer does not have direct control over how the worker does their job, both under the terms of a written contract and in actual practice.
B. The worker’s service is either not part of the employer’s usual business, or they do much of their work off-site.
C. The worker regularly works in their own trade or occupation separate from the employer.

At the federal level, the definition of “employment” in this context is also based on how much control an employer exerts, and how much independence a worker exercises. It is not as specific as New Jersey’s definition, so it tends to be less favorable to employees. The U.S. Department of Labor has stated that it is working on revising the definition.
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June 15, 2023

U.S. Supreme Court Rules in Employee’s Favor in FLSA Claim

by Resnick Law Group, P.C.

Federal and New Jersey employment laws require employers to pay minimum wage and overtime compensation to workers, subject to numerous exemptions. This includes employees who work in an “executive” capacity. While the federal Fair Labor Standards Act (FLSA) does not define this term, regulations provide a working definition that includes a baseline weekly rate of pay. The U.S. Supreme Court recently ruled on a dispute between an employer and an employee who earned significantly more than this amount. The parties disagreed over whether the exemption for executives applied to him. The court ruled in the employee’s favor in Helix Energy Solutions Group, Inc. v. Hewitt, finding that he is entitled to overtime compensation.

Section 7 of the FLSA requires employers to pay non-exempt employees one-and-a-half times their regular wage for hours worked over forty in a week. Section 13(a)(1), however, exempts employees who work “in a bona fide executive…capacity.” Regulations issued by the Wage and Hour Division (WHD) of the U.S. Department of Labor provide a four-part definition of an “employee employed in a bona fide executive capacity”:
1. Weekly pay of at least $684 per week on a “salary basis”;
2. Management as a “primary duty”;
3. Authority to “direct[] the work of two or more other employees”; and
4. Authority or influence over decisions regarding hiring and firing.

The regulations define “salary basis,” in essence, as payment of a predetermined amount no more frequently than once a week. At the time of the events at issue in Helix Energy, the minimum weekly pay amount was $455. The WHD amended the regulation in 2019 to raise it to $684.
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March 17, 2023

New Labor Department Guidance Could Help New Jersey Remote Workers

by Resnick Law Group, P.C.

The Fair Labor Standards Act (FLSA) establishes a minimum wage for the entire country, requires employers to pay overtime when employees work more than forty hours during a week, and provides other protections for workers’ rights. A significant increase in the number of people working remotely over the past few years has raised questions about what constitutes “work time” away from the workplace. Non-exempt employees are entitled to pay for short break periods under the FLSA and New Jersey employment laws. Court decisions and administrative cases addressing this issue, however, have mostly involved time that non-exempt employees have spent in the workplace. The U.S. Department of Labor’s Wage and Hour Division (WHD) issued a Field Assistance Bulletin (FAB) in February 2023 that discusses break time for remote workers under the FLSA. Its conclusions are favorable towards the employees. While the FAB does not have the force of law, courts may be able to rely on it should this issue reach them.

FLSA regulations generally require employers to pay employees for job duties that they have performed, even if the employer did not specifically request it. For example, an employer must pay an employee who continues to work past the end of their shift in order to finish an assignment. This also applies when the employee performs the work off-site, including at the employee’s home.

An employee’s compensable time is not necessarily limited to the time they are actively engaged in their job duties. As a general rule, employees are entitled under the FLSA to get paid for rest breaks, but not meal breaks. Regulations define a rest break as a break lasting no more than twenty minutes that serves to “promote the efficiency of the employee.” “Bona fide meal periods,” as defined by the regulations, typically last at least thirty minutes. They are not considered compensable work time as long as the employee is relieved of all work responsibilities. The question for the WHD involves how these rules apply to remote workers.
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February 10, 2023

Pay Equity and Transparency Laws in New Jersey

by Resnick Law Group, P.C.

Pay disparities among employees are a common form of employment discrimination. Wage gaps exist based on sex, race, and other categories that are protected by New Jersey employment laws. Addressing the problem can be difficult because the evidence is often hidden from view. Many employers have tried, for example, to prevent employees from discussing their wages. State and federal laws now protect employees’ ability to talk about how much they get paid, but a great deal of information remains concealed. A new pay transparency law in New York City requires employers to disclose pay ranges when they advertise job openings. So far, only one city in New Jersey has this type of law. Advocates for pay transparency laws say that they will help address wage gaps among employees.

Several laws address wage disparities and discrimination in New Jersey. These include the following issues:
– Pay equity;
– Attempts by employers to prevent employees from discussing their rates of pay; and
– Pay transparency.

Pay Equity

The federal Equal Pay Act (EPA), found at 29 U.S.C. § 206(d), prohibits wage discrimination based on sex or gender. Generally speaking, employers must pay employees of any gender the same amount for work that “requires equal skill, effort, and responsibility,” and that employees “perform[] under similar working conditions.” Exceptions include systems based on merit, seniority, “quantity or quality of production,” or “any other factor other than sex.”
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January 6, 2023

New Jersey Employment Laws Limit Working Hours for Minors

by Resnick Law Group, P.C.

Children working in dangerous jobs are a common feature in many famous photographs from the late 19th and early 20th centuries. Child labor was common in mines, factories, and other hazardous workplaces until the 1930s when the U.S. Congress passed the Fair Labor Standards Act (FLSA). That law sets strict limits on employment for minors, including the kinds of jobs they may have and the number of hours they may work. New Jersey employment laws also regulate the hours that minors may work. The New Jersey Attorney General (NJAG) recently announced that it had settled a dispute with a restaurant chain over alleged child labor law violations. As part of the settlement, the employer reportedly agreed to pay $7.75 million in damages and fines.

The FLSA’s provisions on child labor prohibit anyone under the age of 14 from working in most jobs. Exceptions may apply with regard to jobs in agriculture, jobs within one’s family, newspaper delivery, and acting for film or television. The original purpose of the FLSA was to prevent children from working long hours in dangerous conditions. Children who are 14 or 15 years old may work limited hours in certain jobs. Between the ages of 16 and 17, the FLSA allows children to work in non-hazardous jobs for a longer number of hours.

Despite many advances in this area, child labor remains an issue throughout the country. A report on children’s rights by the organization Human Rights Watch assigned a letter grade from “A” to “F” to each state based on multiple factors, including child labor laws. While New Jersey received one of the highest grades in the country, it was still only a “C.”

December 2, 2022

New Proposed Independent Contractor Rule Could Help New Jersey Workers

by Resnick Law Group, P.C.

Employment laws in New Jersey and at the federal level guarantee a minimum wage and overtime pay for many employees, as well as many other protections. In order to take advantage of these legal safeguards, a worker must demonstrate that an employment relationship exists between them and their employer. The definition of an “employee” in federal and New Jersey employment statutes is rather vague. The U.S. Department of Labor (DOL) recently issued proposed rules that would establish a new test to determine whether a worker is an employee or an independent contractor. The current rule, which the DOL put in place under the previous presidential administration, is generally favorable to employers. New Jersey’s rule for state law claims presumes that a worker is an employee unless an employer can prove otherwise.

The employer-employee relationship is a complicated concept, legally speaking. It draws on legal theories about an employer’s authority to exert control over a person. For example, how much say does an employer have over when, where, and how a worker does their job? Do they have a specific workstation, monitored by supervisors, where the worker must be during specific working hours? If so, the worker is probably an employee. An independent contractor typically has more autonomy over their work. A large body of federal and state laws protect employees’ rights. An independent contractor’s rights depend on the terms of their contract with the employer.

The DOL’s current rule tends to favor employers. Unlike the New Jersey rule, the federal rule does not presume employee status. It uses two “core factors” to determine a worker’s status: (1) How much control is the worker able to exert over their work? (2) Are they able to earn more money by any means other than increasing their production or working more hours? The more control a worker has over their work and their income, the more likely a federal court will be to classify them as an independent contractor.
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November 4, 2022

New Jersey Class Action Alleges Wage Violations at Theme Park

by Resnick Law Group, P.C.

Workers are entitled to payment for all hours that they perform work for their employers under federal and New Jersey employment laws. Employers must pay non-exempt employees at a rate equal to or greater than the minimum wage set by state law. They must also pay all wages owed to their employees at the end of each pay period. Employers who fail to meet these duties could be liable to their employees for damages. A worker at a New Jersey theme park recently filed a class action in federal court alleging state wage law violations. She claims that the defendant required employees to perform unpaid work both before clocking in and after clocking out.

The lawsuit cites three provisions of New Jersey law. First, the New Jersey Wage and Hour Law (NJWHL) requires employers to pay at least minimum wage to their non-exempt employees. In 2022, the statewide minimum wage is $13 per hour. It will increase to $14.13 per hour on January 1, 2023. It will continue to increase annually until it reaches $15 per hour at the beginning of 2026.

New Jersey employment regulations require employers to pay their workers “for all hours worked.” This generally includes all activities required by employers, particularly those on the employer’s premises. The plaintiff cites two decisions from the U.S. Supreme Court addressing what sorts of activities count as compensable work:
– In Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123 (1944), the court held that iron ore miners were entitled to pay for the time they spent traveling to and from the “working face” of the mine. The trip often involved a precarious journey of 3,000 to 12,000 feet through dark underground tunnels.
– The plaintiffs in Anderson v. Mt Clemens Pottery Co. (1946) had to walk across an eight-acre facility to get from the time clocks to their work areas. This could take up to an hour each day. The court held that this time was compensable.
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October 21, 2022

Bill Pending in New Jersey Legislature Would Improve Rights for Temporary Workers

by Resnick Law Group, P.C.

New Jersey employment laws protect workers against multiple kinds of abuses by employers, such as failure to pay minimum wage or overtime, requiring unpaid work time, and unlawful payroll deductions. Both state and federal statutes address wage and hour violations, but these protections only apply to “employees.” The legal definition of this term rarely includes temporary workers. A bill pending in the New Jersey Senate would create a “Temporary Workers Bill of Rights” that extends many of the legal protections enjoyed by employees to people who work for staffing agencies. The bill has faced multiple hurdles since its introduction in early 2022. While its future is uncertain, lawmakers in support of the bill say it still has a chance at passage.

The federal Fair Labor Standards Act (FLSA) and the New Jersey Wage and Hour Law (WHL) set a minimum wage for non-exempt employees. They also require employers to pay non-exempt employees time-and-a-half for any time they work over forty hours in a week. Neither statute has a detailed definition of “employee.” They both define the term as “any individual employed by an employer.” The protections offered by these laws often do not extend to individuals who work for staffing agencies contracted by other companies to provide temporary workers.

In the most recent version of the pending bill, A1474, the Legislature states several findings related to temporary workers and their working conditions. “[T]emporary help service firms, sometimes referred to as temp agencies or staffing agencies,” employ about 127,000 people in New Jersey. The state has licensed around one hundred temp agencies, while an unknown number of unlicensed agencies “operate outside the purview of law enforcement.” Temporary jobs are heavily concentrated in “service occupations,…production, transportation, and material moving occupations and manufacturing industries.”
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August 26, 2022

Appeals Court Sets Limits on FLSA Collective Actions in New Jersey and Other States

by Resnick Law Group, P.C.

Both federal and state employment laws in New Jersey protect employees’ rights to a minimum wage and overtime pay. While the federal Fair Labor Standards Act (FLSA) does not set the minimum wage as high as New Jersey law, it provides workers with useful enforcement tools. A worker can bring a “collective action” on behalf of other workers with similar federal wage and hour claims. An FLSA collective action is similar to a federal class action, with a few important differences. A recent decision by the Third Circuit Court of Appeals limits the use of FLSA collective actions when the plaintiffs come from more than one state. The ruling should not affect collective actions in which all members of the group are from New Jersey. If you have concerns about possible wage or overtime pay violations, make an appointment with a New Jersey employment lawyer today.

The most recent increase in the federal minimum wage occurred over twelve years ago. It reached its current level of $7.25 per hour on July 24, 2010. The rules for overtime compensation, which require payment at time-and-a-half for time worked over forty hours in a week, have remained the same for decades. These rules only apply to employees who are not exempt under the FLSA. They also do not apply to independent contractors. A wrongful claim that an employee is either exempt or an independent contractor is a violation of the FLSA known as employee misclassification.

The FLSA allows employees to file lawsuits against their employers for alleged wage and hour violations. Notably, § 16(b) of the FLSA allows employees to file suit on their own behalf and on behalf of “other employees similarly situated.” The requirements for a collective action under the FLSA are similar to those for a class action under Rule 23 of the Federal Rules of Civil Procedure. One important difference is that, while many class actions automatically include people who meet the description of class members and receive notice of the suit, the FLSA requires all plaintiffs to consent to participation in a collective action in writing. To put that another way, people may have to “opt out” of a class action and “opt in” to a collective action.
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