Articles Posted in Wage and Hour Disputes

On June 29, 2026, the New Jersey Appellate Division issued a significant decision in Martinez v. T. Slack Environmental Services, Inc., clarifying the procedures for collective wage claims and the applicable statutes of limitations for workers in the state.

The case involved an hourly laborer who worked on both public and private projects for a non-union contractor. The employee alleged that the company failed to pay properly calculated “blended” overtime rates during weeks when he performed a mix of public and private work, or when he worked under different job titles. The lawsuit also claimed the employer failed to pay for “off-the-clock” tasks, such as driving equipment to worksites and loading trucks, in violation of the New Jersey Wage and Hour Law (WHL), Prevailing Wage Act (PWA), and Earned Sick Leave Law (ESLL). The National Employment Lawyers Association-New Jersey (NELA-NJ) appeared in the case as amicus curiae (friend of the court), joining the plaintiff to argue that the state legislature intended for these remedial wage laws to provide a separate and distinct path for representative actions.

A central issue on appeal was whether the worker could bring a representative lawsuit on behalf of other employees without going through the strict class action certification process required by Court Rule 4:32-1, which can be difficult, time-consuming, and expensive. The Appellate Division ruled in favor of the employees, determining that the statutory language of the WHL and PWA operates independently of Rule 4:32-1 and does not require formal class certification. Because these laws are remedial and designed to protect workers from unfair wages, a plaintiff only needs to show that the other workers are “similarly situated” to pursue a representative action.

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.

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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