Wage and Hour Disputes

August 25, 2024

Court Blocks FTC’s Non-Compete Ban: What It Means for New Jersey Employees

In a recent case, the U.S. District Court issued a preliminary injunction against the Federal Trade Commission’s (FTC) “Non-Compete Rule,” which was set to take effect on September 4, 2024. The Non-Compete Rule aimed to make most non-compete agreements unenforceable, significantly altering the employment landscape across the U.S., including in New Jersey. Thus, if left to stand, the recent opinion out of Texas could have far-reaching implications for New Jersey employees.

The FTC’s Non-Compete Rule and Its Implications

The FTC introduced the Non-Compete Rule intending to protect employees from restrictive agreements that limit their ability to work for competitors or start their businesses after leaving a job. Historically, non-compete agreements have been widely criticized for stifling competition and limiting workers’ job mobility. If enforced, the FTC rule would have provided greater freedom for employees in New Jersey to seek better job opportunities without fear of legal repercussions from former employers.

However, the court’s recent decision temporarily blocks the FTC’s Non-Compete Rule, questioning the FTC’s authority under the Federal Trade Commission Act to implement such a sweeping regulation. In this case, the court found that the FTC might lack the substantive rulemaking power to enforce the Non-Compete Rule, raising concerns about the agency’s ability to regulate unfair methods of competition in this manner.

July 12, 2024

New Federal Overtime Rule Takes Effect in July 2024

by Resnick Law Group, P.C.

Overtime laws guarantee that workers receive additional pay for working more than forty hours in a week. Both federal and New Jersey employment laws contain provisions dealing with overtime compensation. The federal Fair Labor Standards Act (FLSA) includes an exemption from the overtime rules for people who work in “a bona fide executive, administrative, or professional capacity.” Also known as the EAP exemption, it covers a wide range of people in management and other specialized roles. The U.S. Department of Labor (DOL) recently published a new rule that revises the EAP exemption. It took effect on July 1, 2024, and expands eligibility for overtime pay to include many people who had previously been exempt.

Section 7 of the FLSA states that employees are entitled to time-and-a-half for hours worked above forty per week. Section 13 covers exemptions from this and other requirements, with the EAP exemption first on the list. The statute does not provide definitions of the terms “executive,” “administrative,” or “professional.” The DOL took on that task in its regulations. It discusses the EAP exemption in 29 C.F.R. Part 541.

The EAP exemption has three main requirements:
– The employee is paid on a salary or fee basis, not hourly.
– Their salary is equal to or greater than a threshold amount set by the regulations.
– Their job duties meet Part 541’s definitions of “executive,” administrative,” or “professional.”
The threshold amount for all three roles, prior to July 1, 2024, was $684 per week. This amount, which is equal to $35,568 per year, has remained the same for many years. The new rule finally updates it.
Continue reading

June 20, 2024

U.S. Supreme Court Rules in Favor of Furloughed Federal Employee

by Resnick Law Group, P.C.

When an employer violates your rights, knowing what to do or where to turn can be difficult. It is crucial to seek legal help as soon as possible because of strict filing deadlines under federal and New Jersey employment laws. Missing a filing date can result in delays at best, or a refusal to hear your case at worst. Most employment laws give employees at least six months to submit a claim alleging unlawful employment practices. The time to file an appeal is often much less than the time to file an initial complaint. The U.S. Supreme Court recently ruled in favor of a federal government employee who missed a deadline to appeal a decision rejecting his claim for unpaid wages. The decision in Harrow v. Department of Defense makes an exception to employment law’s stringent filing deadlines.

Lawsuits are subject to a filing deadline known as the statute of limitations, which requires plaintiffs to file suit within a limited time after the event that led to the dispute. Employment law often involves administrative agencies like the Equal Employment Opportunity Commission (EEOC) or the New Jersey Division on Civil Rights (DCR). Before filing a lawsuit alleging certain employment law violations, you must file a charge with the EEOC or a complaint with the DCR.

The deadline to file a DCR complaint is 180 days from the date of the alleged employment law violation. For discrimination charges filed with the EEOC, the deadline is also 180 days unless a state agency also enforces a state law against the same type of discrimination. The EEOC’s filing deadline is 300 days in that situation. An additional deadline applies once these agencies have completed their investigations. If the EEOC issues a “right to sue” letter, for example, you have sixty days to file suit in federal court.
Continue reading

June 13, 2024

New Jersey Supreme Court Limits Retroactive Reach of State Wage Theft Law

by Resnick Law Group, P.C.

New Jersey employment laws protect workers from wage theft. This may occur when an employer requires unpaid work from an employee, and the rate of pay that the employee receives for the total amount of hours worked falls below the state minimum wage. It also often happens when an employer does not pay the time-and-a-half rate required by state law for overtime. Employers that engage in wage theft are liable to employees for unpaid wages and additional damages. A law that took effect in 2019 expanded the “lookback” period for wage theft claims. This is the length of time before the date of an employee’s claim for which they may recover unpaid wages and damages. In May 2024, the New Jersey Supreme Court resolved a dispute over whether this lookback period extends before the date the 2019 law took effect. The court held that it does not.

Before the 2019 law, the lookback period for wage theft claims under both the Wage and Hour Law (WHL) and the Wage Payment Law (WPL) was two years. Suppose an employer begins engaging in wage theft against an employee in July 2014. If that employee filed a wage theft claim on July 1, 2018, they would only be able to recover damages for the period beginning on July 1, 2016.

The new law, enacted as Chapter 212, took effect as soon as the governor signed it on August 6, 2019. It expanded the lookback period from two to six years. It also added new damage provisions, including liquidated damages of up to 200% of the unpaid wage amount. Disputes soon arose about whether the expanded lookback period could include employer conduct that occurred before the law’s effective date. A claim filed on August 5, 2019 could recover damages back to August 5, 2017. The question was whether a claim filed on August 7, 2019 could reach back to August 7, 2013. One such dispute made its way to the state supreme court.
Continue reading

February 9, 2024

Domestic Workers’ Rights Under New Jersey Employment Law

by Resnick Law Group, P.C.

Domestic workers, such as in-home caregivers, play a vital role in our society. Federal and New Jersey employment laws treat some domestic workers differently than other workers, including exemptions for minimum wage and overtime pay. The federal government has made it a priority to improve legal protections for domestic workers. The U.S. Department of Labor (DOL) recently issued a series of sample employment contracts for domestic workers that outline their legal rights. New Jersey is making similar improvements, such as the New Jersey Domestic Workers’ Bill of Rights (DWBR), which the governor signed into law in January 2024.

The Fair Labor Standard Act (FLSA) sets a nationwide minimum wage of $7.25 per hour and requires employers to pay time-and-a-half for overtime work. The law contains numerous exceptions and exemptions, including domestic workers in certain circumstances. The DOL defines “domestic service employment” as “services of a household nature” performed in a private home. This may include babysitters, nannies, home health aides, nurses, and handymen.

As a general rule, the FLSA provides the same protections for domestic workers regarding minimum wage and overtime as it does for other workers. It does, however, make two exemptions:
– Section 13(a)(15) of the FLSA exempts several types of workers from its minimum wage and overtime provisions: babysitters who are “employed on a casual basis” and individuals who “provide companionship services” to people who cannot care for themselves. The DOL interprets employment “on a casual basis” to mean that the individual does not rely solely on babysitting income or only provides services intermittently. The “companion” exemption applies to individuals who care for an “elderly person or person with an illness, injury, or disability.”
– Section 13(b)(21) exempts live-in domestic workers from the FLSA’s overtime provisions.
Continue reading

January 9, 2024

New Tax Law Could Affect Remote Employees of New Jersey Employers

by Resnick Law Group, P.C.

Employee paychecks are subject to some quite complicated regulations, particularly when it comes to what employers may, may not, and must withhold from employee pay. Perhaps the most well-known form of withholding is for Social Security and Medicare, commonly known as payroll taxes, and federal income tax. States that maintain their own income tax may require employers to withhold that as well. New Jersey is among those states. When employment relationships cross state lines, withholding requirements can get even more confusing. New Jersey employment laws give workers some remedies for unlawful paycheck deductions, but this does not necessarily cover errors involving tax withholding. A new law passed by the state legislature addresses New Jersey income tax withholding for out-of-state remote workers based on a rule known as the “convenience of the employer.”

New Jersey employers may withhold money from employee paychecks when required to do so by state or federal law, such as for federal income tax. They may withhold funds from paychecks for any other purpose only when the employee has authorized it in writing. Authorization can come from an individual employee or a collective bargaining agreement with an authorized representative.

Unauthorized deductions from employee paychecks can result in penalties that include fines and jail time. Employees may also bring a civil lawsuit to recover the amounts unlawfully withheld, plus three times that amount as liquidated damages, court costs, and attorney’s fees. This provision of New Jersey law does not apply to tax withholding errors made by an employer. An employee whose employer fails to withhold the correct amount of income tax will be liable to pay the correct amount. It might, however, be possible to raise the employer’s error as a defense to the assessment of late payment penalties.
Continue reading

January 5, 2024

Bill in New Jersey Legislature Would Require Pay Transparency

by Resnick Law Group, P.C.

Employment discrimination can take many forms, some of which are practically invisible to anyone who does not have access to an employer’s books. Pay disparities based on factors like sex or race are still common in many workplaces. Laws like the federal Equal Pay Act (EPA) attempt to address gender-based wage gaps, and antidiscrimination laws can help take on pay disparities based on other factors. Some employers maintain policies that make addressing wage gaps difficult, such as by leaving pay information out of job listings. Advocates for fair pay need this information to identify where wage gaps are occurring. Pay transparency laws attempt to rectify this issue by requiring disclosure of wage rates. New Jersey employment law currently does not include pay transparency provisions, but a bill pending in the state legislature could change that.

Many wage gaps are not intentional, meaning they did not result from conscious decisions by current managers to pay certain employees less than other employees who work the same or similar jobs. Instead, many pay disparities reflect a long history of discrimination that goes back to a time when employers did make conscious decisions to discriminate. Women, for example, often received lower pay than men based on gender stereotypes. This created a longstanding practice of paying women less than men for the same work that persists to this day. Race-based wage gaps are also very common, resulting in pay disparities that affect women of color more than most other groups.

The EPA and the New Jersey Law Against Discrimination (NJLAD) both prohibit pay discrimination based on factors like sex. The NJLAD goes further and covers every protected category, including race, color, and national origin. It also protects employees from retaliation for asking other employees how much they make or disclosing their pay rate to others.
Continue reading

September 21, 2023

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

by Resnick Law Group, P.C.

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.
Continue reading

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.
Continue reading

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.
Continue reading