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A significant new decision by the United States Court of Appeals for the Third Circuit has clarified the limits of the Fair Labor Standards Act (FLSA), ruling that employees cannot use the federal statute to sue for “overtime gap time.” In Secretary United States Department of Labor v. Comprehensive Healthcare Management Services LLC, decided on June 3, 2026, the court determined that the FLSA’s plain text does not provide a remedy for unpaid, non-overtime hours worked during a pay period.

The case involved Comprehensive Healthcare Management Services, which operated fifteen healthcare facilities across Pennsylvania. Following an investigation, the Department of Labor sued the company on behalf of nearly 6,000 employees for systemic wage and hour violations. At trial, the District Court found that Comprehensive utilized an inaccurate time clock system, which led to employees being paid for their scheduled shifts rather than the actual hours they worked. The court also found that employees regularly worked through meal breaks without compensation and that the company miscalculated overtime rates by failing to include bonuses and shift differentials. The District Court initially ruled in favor of the Secretary of Labor, awarding over $35.8 million in damages.

Unfortunately, the Third Circuit reversed a crucial portion of this award related to “overtime gap time.” Overtime gap time refers to unpaid, non-overtime hours worked in a week where an employee also exceeds the overtime threshold. The appellate court firmly held that the FLSA only mandates two things: the payment of a minimum wage and the payment of overtime for hours worked over 40 in a week. Because the statute does not expressly contemplate compensation for “gap time,” the court ruled that employees cannot recover straight-time wages under the FLSA, provided their average hourly pay does not fall below the minimum wage. The court noted that aggrieved employees are not left without recourse, as they may bring basic contract actions or pursue claims under state wage laws to recover these unpaid wages. For example, in New Jersey, employees are covered by the New Jersey Wage Payment Law, which mandates treble damages for wages not paid on time and in the correct amount.

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A groundbreaking new decision by the New Jersey Appellate Division has clarified that job applicants and employees have the right to sue employers who discriminate against them for recreational cannabis use. In the recent case of Sanders v. The Levari Group, LLC, decided on May 26, 2026, the court determined for the first time that the Cannabis Regulatory, Enforcement Assistance, and Market Modernization Act (CREAMMA) provides an implied private right of action for individuals.

The plaintiff, Darlene Sanders, applied and interviewed for a customer service position with the defendant. After receiving and accepting a job offer, she submitted to a pre-employment drug screening as part of the company’s standard hiring process. The test revealed the presence of cannabis from recreational use within the past thirty days, although Sanders was not under the influence at the time of her application. When Sanders followed up on her start date, a human resources representative told her she could take a repeat drug test within a week at her own expense. Unable to afford the retest, she declined, and the company rescinded the job offer and refused to hire her. Sanders sued the company, alleging it violated her rights under CREAMMA by refusing to hire her on the basis of her recreational cannabis use.
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A recent decision by the New Jersey Appellate Division serves as a stark reminder of the strict compliance standards employers face when navigating the New Jersey Earned Sick Leave Law (ESLL). In Cano v. County Concrete Corporation, the court clarified the narrow construction industry exemption, the requirements for existing PTO policies to count as ESL, the consequences of poor recordkeeping and notice, and the rights of similarly situated employees.
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A recent decision by the New Jersey Appellate Division serves as a stark reminder of the hurdles workers can face when seeking protection under the New Jersey Law Against Discrimination (LAD). In Sanger v. Next Level Business Services, Inc., the court affirmed that independent contractors—even those facing egregious allegations of harassment—fall outside the protective umbrella of the LAD.

The plaintiff, Nisha Sanger, was an experienced recruiter who performed services for Cognizant Technology Solutions through an agency agreement with Next Level Business Services (NLB). Her complaint alleged disturbing conduct: inappropriate physical touching by a supervisor and a subsequent “proposition” to engage in sexual relations with a high-level executive to secure her position. When she refused, she was terminated shortly thereafter. However, the court never reached the merits of these harassment and retaliation claims. Instead, the case turned on a single threshold question: Was Ms. Sanger an employee or an independent contractor?
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Many workers are entitled to payment of a minimum wage and extra pay for overtime work. Workers who believe their employers have failed to pay them the correct amount can recover damages in civil lawsuits under New Jersey employment law. If an employer has falsely classified a worker as an independent contractor instead of an employee to avoid minimum wage or overtime, they may be liable to that worker under state law. The New Jersey Department of Labor and Workforce Development (LWD) recently filed a lawsuit against a general contractor and multiple subcontractors involved in a large construction project in Jersey City. The suit alleges wage violations, employee misclassification, and other claims.

New Jersey law currently sets the minimum wage at $15.49 per hour for most employers. This is the minimum rate that must pay to non-exempt workers. Both New Jersey and federal law require time-and-a-half for hours worked over forty in a week; thus, if a non-exempt worker makes $18 per hour and works fifty hours in a week, the employer must pay them $27 per hour for the last ten of those hours worked.

Failure to pay minimum wage and overtime, also known as “wage theft,” may cost workers across the country as much as $50 billion each year. This amount exceeds all other forms of theft, such as burglaries and robberies, combined. Private lawsuits and government regulators only recover a fraction of the amount lost to wage theft.

The public also loses because of wage theft. Worker misclassification alone may cost New Jersey taxpayers around $300 million per year in lost contributions to unemployment insurance, Social Security, Medicare, and income taxes.
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Federal and New Jersey employment laws protect employees and job applicants from disability discrimination. Disability discrimination encompasses refusing to hire or firing someone because of a disability, providing different pay or other forms of compensation due to a disability, or refusing to provide reasonable accommodations that would enable an individual with a disability to perform their job duties. The U.S. Supreme Court recently issued a ruling in a case alleging disability discrimination in compensation, specifically employer-sponsored health insurance, under the Americans with Disabilities Act (ADA) of 1990. The allegedly discriminatory act did not affect the plaintiff until after she had retired. The court ruled that she was no longer an “employee” as defined by the ADA and did not have standing to file a lawsuit.

The ADA states that employers may not “discriminate against a qualified individual on the basis of disability in regard to… employee compensation” and other matters. The statute defines a “qualified individual” as someone who can “perform the essential functions” of a job the person “holds or desires,” either without assistance or with reasonable accommodations. The meaning of the words “holds or desires” was at the center of the Supreme Court case.

The plaintiff in Stanley v. City of Sanford began working as a firefighter for a city fire department in 1999. She was diagnosed with a chronic illness in 2016, and as a result had to retire from the fire department in 2018 after approximately nineteen years on the job.
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Federal and New Jersey employment laws protect workers’ rights to organize and advocate for themselves. The National Labor Relations Act (NLRA) provides procedures for workers to decide whether to join or form a union and to elect representatives who may engage in collective bargaining with their employer. Once the employees have chosen a union to represent them, their employer must notify the union about certain employment decisions and give the union an opportunity to negotiate. Included in these employment decisions are decisions related to employee compensation. The Third Circuit Court of Appeals recently ruled that a New Jersey nursing home violated the NLRA by reducing bonus payments during the COVID-19 pandemic without notifying the employees’ union representatives.

Section 8(a) of the NLRA identifies “unfair labor practices by employer[s].” These include:
· Interfering with the rights guaranteed by § 7 of the statute, such as employees’ right “to bargain collectively through representatives of their own choosing”; and
· Refusing to participate in collective bargaining with the employees’ lawfully elected representatives.
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For employees who earn commissions, a recent decision by the New Jersey Supreme Court has provided crucial clarity and protection. In the case of Musker v. Suuchi, Inc., the state’s highest court unequivocally held that commissions earned for labor or services rendered are indeed “wages” under the New Jersey Wage Payment Law (“WPL”). This ruling overturns a prior Appellate Division decision and reinforces the broad protections afforded to employees under the WPL.

The Backstory: Commissions on PPE Sales Sparks Legal Battle
The case arose when Rosalyn Musker, a sales employee of Suuchi, Inc., sought commissions for her sales of personal protective equipment (PPE) during the COVID-19 pandemic. After Musker successfully generated significant revenue through these sales, a dispute arose regarding the amount of commission she was owed and whether these commissions qualified as “wages” under the WPL.

The trial court initially sided with the employer, arguing that the PPE commissions were “supplementary incentives” designed to motivate Musker beyond her regular duties and were therefore excluded from the WPL’s definition of wages. The Appellate Division affirmed this decision.
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New Jersey Employees have a vast array of rights thanks to the state’s expansive employment laws. The New Jersey State Wage and Hour Law (WHL), for example, requires employers to pay a minimum wage and overtime to non-exempt employees. Independent contractors are not entitled to these types of protections, and thus employers sometimes try to falsely classify workers as such. New Jersey takes employee misclassification very seriously and grants employees the right to bring civil lawsuits to recover unpaid wages and other damages. In addition, the Department of Labor and Workforce Development (LWD) frequently pursues administrative enforcement actions. Employers in the construction industry could even face criminal penalties for misclassifying employees as independent contractors.

The WHL and other laws allow employees to sue for misclassification. New Jersey has two statutes that impose administrative penalties and other consequences on employers that misclassify workers:

  1. A law passed by the state legislature in 2019 that establishes administrative penalties for most employers in the state; and
  2. The Construction Industry Independent Contractor Act (CIICA), passed in 2007, which imposes criminal penalties on supervisors, managers, or other individuals who misclassify construction workers. The severity of the penalties depends on the circumstances.

The 2019 misclassification law does not define the terms “employee” or “independent contractor.” New Jersey courts have adopted the “ABC test” to determine whether a worker should be classified as an independent contractor or employee. This test is favorable to employees and requires the employer to meet strict criteria in order to classify a worker as an independent contractor. The LWD has proposed adopting the ABC test in all its misclassification cases. The CIICA already includes the ABC test in its definition of “employee.”
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Laws that protect workers from employment practices like discrimination or wage violations are not very helpful if people fear losing their jobs or facing other consequences for coming forward. For this reason, federal and New Jersey employment laws prohibit retaliation for various protected actions, including opposing suspected unlawful policies or practices and cooperating with government regulators. Employers who retaliate against employees for engaging in protected activities may be liable for damages. The New Jersey Attorney General’s Division on Civil Rights (DCR) recently issued a Finding of Probable Cause in a case alleging numerous violations of the New Jersey Law Against Discrimination (NJLAD). This is a relatively early stage in the administrative process and is not the same as a verdict finding an employer liable for violating the NJLAD, but if an employer cannot reach a settlement with the DCR after a Finding of Probable Cause, an administrative prosecution may follow.

Section 11(d) of the NJLAD, found at N.J. Rev. Stat. § 10:5-12(d), makes it an “unlawful employment practice” for an employer to “take reprisals against any person” because of certain actions. These actions include:
– Filing a legal complaint alleging NJLAD violations;
– Providing testimony or other assistance in a legal proceeding brought under the NJLAD;
– Seeking legal advice about rights under the NJLAD; and
– Stating one’s opposition to acts that one believes violate the NJLAD.

The NJLAD’s anti-discrimination provisions cover much more than employment discrimination. They also cover discrimination in housing, mortgage lending, consumer credit, banking, and public accommodations. The statute’s anti-retaliation provisions apply broadly to people who oppose any type of discrimination it addresses. In 2010, the New Jersey Supreme Court affirmed a broad view of the NJLAD’s protections against retaliation. It stated in its ruling that the NJLAD’s purpose is both “to fight discrimination wherever it is found…[and] to protect those who assist in rooting it out.”
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