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Articles Posted in Wage and Hour Disputes

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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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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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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Arbitration can allow the parties to a dispute to avoid the time and expense of litigation. More and more businesses are including clauses in consumer and employment contracts that require the parties to go to arbitration before filing a lawsuit. In some situations, arbitration may tend to favor businesses over individuals for numerous reasons. New Jersey lawmakers have attempted to limit the availability of mandatory arbitration contracts for certain claims, but several courts have ruled that the Federal Arbitration Act (FAA) precludes such laws. The FAA grants broad approval to arbitration contracts and arbitration awards. It also excludes certain groups of workers from its provisions. The U.S. Supreme Court recently ruled in favor of an airline employee who objected to arbitration of her overtime compensation claims. The ruling in Southwest Airlines Co. v. Saxon held that the employee is a “transportation worker” who is exempt from the FAA. If you have questions regarding arbitration in the workplace, contact a New Jersey employment lawyer to discuss your situation.

An arbitration proceeding resembles litigation in many ways. Both parties to a dispute must agree in advance to use arbitration. The parties present evidence and arguments to a neutral third party, known as the arbitrator. After considering both sides’ cases, the arbitrator may make an award that is similar to a verdict.

The FAA states that arbitration agreements are generally “valid, irrevocable, and enforceable,” except when they might not be under contract law principles like fraud or duress. If an arbitration agreement specifically states that the arbitrator’s award will be binding, the FAA limits courts’ authority to do anything other than confirm the award and enter it as a judgment, with few exceptions. Courts can only vacate or modify an arbitrator’s award with evidence of corruption, fraud, other forms of misconduct, or significant errors.
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New Jersey’s employment laws guarantee a minimum wage and overtime compensation for millions of workers. They protect employees from various forms of discrimination and harassment in the workplace. They bar employers from retaliating against workers who object to unlawful or unethical conduct. In order to enjoy the benefits of state and federal employment laws, however, a worker must be an “employee.” The definition of “employee” can be ambiguous and subject to debate. Employers may try to describe an employee as an independent contractor in order to avoid obligations set by state wage and hour laws and other statutes. New Jersey has developed a test for determining whether an individual is an employee. A federal judge recently granted summary judgment for a plaintiff in a wage and hour dispute.

Wrongfully categorizing an employee as an independent contractor is known as “employee misclassification.” It is considered a violation of wage and hour laws when an employer does it in order to avoid obligations established by those laws. New Jersey has adopted the “ABC test” to determine whether a worker is an employee or not. The test receives its name from the definition of “employment” found in New Jersey’s Unemployment Compensation Law at N.J. Rev. Stat. § 43:21-1(i)(6)(A) through (C).

A worker is presumed to be an “employee” under the ABC test unless they meet all three of the following criteria:
A. The employer does not exercise “control or direction” over the worker’s job duties and job performance.
B. Either the services the worker performs are “outside the [employer’s] usual course of…business,” or they perform those services “outside of all the [employer’s] places of business.”
C. The worker’s services are normally part of their own “trade, occupation, profession or business,” which is separate from the employer’s business.
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Cryptocurrency has been in the news lately. Its advocates point to features like transparency, decentralization, and a lack of connection to any nation’s laws or banking systems. They tout its potential for replacing national currencies like the dollar or the euro. Critics note that cryptocurrency transactions require tremendous amounts of energy and that it often functions more as a form of investment property than currency. For New Jersey employees, this raises a question that has not received a great deal of attention in the legal world yet. Can employers pay their employees in cryptocurrency? New Jersey’s wage and hour laws seem to suggest that employers cannot, or should not, do this at the present time.

What Is Cryptocurrency?

Cryptocurrency is a type of digital or virtual money. It uses a technology known as “blockchain” to record transactions. A blockchain is an open-source ledger that records every cryptocurrency transaction. It also records the creation of new cryptocurrency, which is a process known as “mining.” These processes are distributed across computers all over the world. The first cryptocurrency, Bitcoin, first appeared in 2008 and remains the largest and most famous example.

In principle, people can use cryptocurrency as a medium of exchange. Few businesses accept cryptocurrency as payment, though. Many people buy and sell cryptocurrency as investments, somewhat similar to the way investors buy and sell stocks and other securities.
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New Jersey’s wage and hour laws protect workers’ rights to earn a minimum wage and receive overtime compensation. While these are perhaps the most well-known rights under state law, New Jersey protects other rights regarding workers’ compensation. New Jersey does not require employers to provide most workers with breaks for meals or rest, except for paid meal breaks for employees under the age of eighteen. Other workers could be entitled to pay during their meal breaks if their employer requires them to remain at work during that time.

When “Hours Worked” May Include Meal Breaks

A state regulation requires employers to include “[a]ll the time the employee is required to be at his or her place of work or on duty” in the computation of how many hours that employee has worked. If employees are free to take a meal break anywhere they want, that time is likely to be unpaid. An employer that requires employees to remain at their desks or workstations during meal breaks, however, might be required to pay them for that time.

New Jersey courts have noted that the regulation does not define “place of work.” In an unpublished decision from June 2020, a New Jersey federal court considered whether mandatory security screenings at the end of the workday should count as paid time under New Jersey law. The court applied a two-part test to determine whether a location counts as a “place of work”: (1) the employer controls or mandates activity in that area, and (2) the activity mainly benefits the employer. It ruled that the security screenings satisfied the test. In another ruling in the same case, issued in 2021, the court ruled that mandatory COVID tests administered at the beginning of the workday might also satisfy the “place of work” test.

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Federal and New Jersey employment laws protect employees against a variety of actions by their employers, such as discrimination, retaliation, and failure to pay minimum wage or overtime. The Fair Labor Standards Act (FLSA) sets a nationwide minimum wage and establishes overtime compensation rules. For the FLSA and other statutes to apply, an employment relationship must exist between a worker and a business. When multiple individuals or businesses exercise authority over a worker, the “joint employer” rule states that each employer could be liable for wage and hour claims and other employment law violations. The U.S. Department of Labor (DOL) changed its rule regarding joint employment under the FLSA in 2020. This year, new management at the DOL rescinded the new rule and reverted to the old joint-employer rule.

What Is a Joint-Employer?

Joint employers each have control over the terms of an employee’s job, such as job duties, hours, and wages or salary. Examples of joint employment include:
– Business A contracts with Business B to provide services at Business B’s worksite. The contract states that Business B may determine the hours of work and other conditions for employees sent by Business A. Although Business A writes the paychecks, they may both be considered an individual’s “employers.”
– Business 1 operates a franchise under a contract with Business 2, the franchise owner. The franchise agreement gives Business 2 control over many or most of the terms and conditions of employment, while making Business 1 responsible for day-to-day HR matters.

What Is the Joint-Employer Rule?

The joint-employer rule states that the employers are jointly and severally liable for employment law violations. No single rule exists regarding joint employment. Instead, statutes or regulations establish a joint-employer rule for different laws. For the FLSA, the DOL established a rule holding that joint employment existed when:
– Employers have agreed to “share [an] employee’s services”;
– One employer is “acting directly or indirectly in the interest of” another employer regarding the employee; or
– One employer controls the other employer, or they are under “common control,” and they are “deemed to share control of the employee, directly or indirectly.”
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As the COVID-19 pandemic shows signs of winding down, and New Jersey lifts many of the restrictions that have been in place for over a year, employers across the state report that they cannot find enough workers for their businesses. Some employers, rather predictably, blame expanded unemployment benefits. That might be one possible explanation, but it alone does not explain the reported worker shortage. Many of the industries reporting problems finding enough employees, to be blunt, do not have the best track records when it comes to fair wages, workplace safety, and other things that workers should be able to expect from their employers. Federal and New Jersey employment laws guarantee various protections for workers, and the fact that people are not hurrying to return to certain workplaces might serve as a reminder that maintaining these legal protections is an ongoing struggle.

Workers’ Rights Under Federal and New Jersey Law

Statutes at the state and federal level guarantee many New Jersey workers a minimum wage. They also protect workers’ right to a workplace free of discrimination, harassment, and unreasonable danger.

Minimum Wage

The Fair Labor Standards Act (FLSA) has set the federal minimum wage at $7.25 per hour since 2010. 29 U.S.C. § 206(a)(1)(C). For tipped employees, which include many restaurant workers, employers must pay a base wage of $2.13 per hour. Id. at § 203(m)(2), 29 C.F.R. § 531.59.
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The minimum wage is the lowest amount that an employer can pay to an employee under federal and state law in New Jersey, provided that employee is not exempted from laws governing wages and hours of work. The New Jersey Legislature has established a minimum wage for the state that is greater than the federal rate. Employee advocates have sought amendments to federal law that would raise the minimum wage from its current level of $7.25 per hour to $15 per hour. These efforts have not been successful, but there is good news for some workers in New Jersey. The White House issued an executive order (EO) that will raise the minimum wage for federal government contractors to $15 per hour. The EO will take effect in early 2022. If you are concerned that your employer is not paying you the minimum wage, reach out to a New Jersey employment attorney to learn more about your rights.

Federal Minimum Wage

Congress first established a nationwide minimum wage in June 1938, when it passed the Fair Labor Standards Act (FLSA). The first minimum wage was $0.25 per hour. Congress has amended the FLSA multiple times to raise the minimum wage. The last time this happened was the Fair Minimum Wage Act of 2007, which raised the minimum wage to $7.25 per hour by 2010. See 29 U.S.C. § 206(a)(1)(C).

Based solely on inflation, the original minimum wage of $0.25 per hour would equal about $4.73 today. The overall cost of living has increased more than that, though, and critics of the federal minimum wage argue that $7.25 per hour is not enough to support most individuals, let alone families.
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