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COVID-19: What Can An Employer Do?

As many businesses are temporarily shutting down due to Governor Murphy’s closure order here in New Jersey, what can those other employers do who remain open to help safeguard against COVID-19 infestation of its workplace. Well, the answer might surprise you thanks to a recent guidance from the Equal Employment Opportunity Commission (“EEOC”).

Under this EEOC Guidance document on the ADA and the COVID-19 virus, several measures are outlined that employers can use to protect its workplace. Along with stressing the need to follow good hygiene practices as recommended by the CDC, ADA-covered employers during a pandemic like ours may additionally ask employees if they are experiencing symptoms of the pandemic virus. For COVID-19, these include symptoms such as fever, chills, cough, shortness of breath, or sore throat. Employers must however maintain all information about employee illness as a confidential medical record in compliance with the ADA. Also, while generally measuring an employee’s body temperature is a medical examination, because the CDC and state/local health authorities have acknowledged community spread of COVID-19, and issued attendant precautions, employers may also measure employees’ body temperature without running afoul of any legal requirements. (However, note of caution: be aware that some people with COVID-19 do not have a fever.) Finally, you can also direct persons with symptoms of the virus to go home and leave work or just stay at home if they have any sickness at all.  The CDC states that employees who become ill with symptoms of COVID-19 should leave the workplace. Significantly, the ADA does not interfere with employers following this advice, and many of my employer clients are regularly telling employees this to get that message out about staying home.

So, you can certainly be proactive in guarding your workplace consistent with the above guidelines. And given the serious public health crisis that now exists, I suspect even the New Jersey Department of Labor will have no issue with employers who follow this ADA guidance, so long as confidentiality is preserved relating to the receipt of employee medical information.

Please everyone out there be careful and stay safe during these trying times.  We will collectively get through this together if we just act smart and do all that can be done to keep our workplaces safe when continuing to operate.

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Be Warned About NJ WARN

Employers already know that, anytime a mass layoff or plant closing is contemplated, there are significant federal and New Jersey state law notice requirements. This past January, 2020, Governor Murphy signed into law a radical legislative amendment to the New Jersey WARN Law (known officially as the “Millville Dallas Airmotive Plant Job Loss Notification Act”) that makes it the most costly and burdensome reduction in force law soon to be in force in the United States.

Beginning on July 19, 2020, the following drastic changes will be effective under the newly revised New Jersey WARN Law.

  1. The New Jersey WARN Law will be triggered by a termination of 50 or more employees, regardless of employee tenure or hours worked, and with the aggregation of all terminations across the state, no matter where in the state the termination occurred.  Under this change, no longer will employers be able to ignore part-time employees in calculating the threshold number for coverage, and coverage is no longer limited by looking at only a single site of employment. The amendments also eliminate the previous requirement under the statute that a mass layoff would only occur if at least 33 percent of a workforce was affected.
  2. The required notice period under the NJ WARN Law will be 90, and not the current 60 days.
  3. Severance Pay will be automatic! This is the most radical of the changes made to the New Jersey WARN Law.  Under the current law, severance pay was only required if the employer failed to provide the necessary 60 days’ notice. When the revised New Jersey WARN Law is triggered, employers must pay employees one week of severance for each year of employment!  Where the employer has failed to meet the Law’s notice requirements, the severance obligation requires an additional payment of four more weeks on top of what is already statutorily required.
  4. Under the revised Law, the above required severance payments cannot be waived without state or court approval. So, any settlement of contested New Jersey WARN Law claims will need to receive either Court or state agency approval.
  5. The coverage of the New Jersey WARN Law has been expanded to include all employers with at least 100 employees, regardless of employee tenure or number of hours worked. Previously, employees with either less than six months of service, or who worked less than 20 hours per week, could be excluded from this threshold calculation.  No more. The part of the Law that requires that an employer be in operation for at least three years thankfully remains unchanged.

In light of these sweeping changes to the NJ WARN Law, employers will now need to proceed with even greater caution when contemplating a possible plant closing, mass layoff, or even just a significant layoff. Employers must be aware of and adhere to these new requirements, especially those involving the timing for issuing the required notice and the making of required severance payments. Special precautions must also be followed when seeking a release of claims in connection with any type of covered reduction in force. When the New Jersey WARN Law is applicable, the employer will now have to pay employees more than just the statutorily required amount of severance to obtain an effective release of claim. This is because, to obtain a legally effective release, the employee must be given something by the employer beyond what an employee is already legally entitled to receive.

So, you have now been warned about the amended New Jersey WARN law! Please take these precautionary words to heart!

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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Pregnancy Discrimination Explained

In a recent New Jersey Appellate Division case, Delanoy v. Township of Ocean, No. A-2899-17T4 (App. Div. January 3, 2020), our state appellate court issued a significant new decision that explains what an employer’s legal obligations are to eliminate discrimination against (and provide reasonable accommodations to) its pregnant employees. This is the first published court opinion addressing these important legal issues for employers.

Back in 2013, the New Jersey Legislature amended the New Jersey Law Against Discrimination (“LAD”) through passage of the New Jersey Pregnant Workers Fairness Act (“PWFA”).  The PWFA revised the LAD to expressly prohibit pregnancy-based discrimination in employment while imposing other legal requirements upon employers regarding how pregnant employees could be treated in the workplace. Among those other important legal requirements, the PWFA obligates employers, subject to an undue hardship exception, to afford reasonable accommodations in the workplace to pregnant women, when requested, and also to not penalize women due to their status of being pregnant.

The Plaintiff in Delanoy was employed as a police officer. When she became pregnant with her second child, she informed her supervisor that at the direction of her doctor she needed to be taken off her patrol duties and receive some sort of light duty position during the period of her pregnancy. As a result of her request, the employee was placed into a light duty non-patrol position pursuant to a “Maternity Assignment Standard Operating Procedure” that was a previously adopted policy by the employer. That policy enabled pregnant workers to work a different maternity job assignment, but in exchange for the modified assignment, the pregnant officer had to use all of her accrued paid leave time off (e.g. vacation, personal and holiday time) before going on that different work assignment. The police department employer also had a separate light duty assignment policy for non-pregnant injured officers who also needed a different temporary job assignment. Unlike the maternity reassignment policy, this light duty policy gave the police chief the authority to waive the condition of utilizing accrued leave time as a prerequisite for receiving the light duty assignment.

Plaintiff filed suit against her employer claiming that the maternity reassignment policy discriminated against pregnant employees since it was less favorable than the separate light duty non-pregnancy policy, which made provision for the waiver of the required exhaustion of paid leave time. Because of this disparity, the Plaintiff argued that the policy on its face discriminated against pregnant employees in violation of the PWFA because such employees were penalized in requesting an accommodation by losing their paid leave time as a condition for receiving the requested accommodation.  Reversing the trial court’s determination of no discrimination, the Appellate Division agreed with the Plaintiff that the maternity assignment policy discriminated against pregnant workers because unlike non-pregnant workers who could seek an exception to the paid leave use requirement under the light duty policy, the maternity reassignment policy allowed for no such exemption. In light of this finding, the court declared the policy to be illegal on its face and enjoined its further enforcement moving forward by the employer.

In light of the court’s ruling in Delanoy, employers need to familiarize themselves with the unique obligations owed to pregnant workers who may need a workplace accommodation under the PWFA.  Not only does that law prohibit discrimination against pregnant workers, but it also affords those employees with the opportunity to receive an accommodation because of their physical condition.

Hence, to assist employers in understanding that accommodation duty, the PWFA cites various examples of possible required accommodations, which could include “bathroom breaks, breaks for increased water intake, periodic rest, assistance with manual labor, job restructuring or modified work schedule, and temporary transfers to less strenuous or hazardous work….”  Of course, this accommodation duty is subject to application of an undue hardship exception, and the law likewise lays out various considerations for making that determination as well (i.e. size of employer, size of work facility, size of company budget, etc.).

In sum, the PWFA significantly changed the legal landscape for employers as it relates to its pregnant workforce, so employers must be ever cognizant of the law’s requirements and ensure that workplace policies do not treat non-pregnant workers better than pregnant workers, or punish such employees due to their condition, especially those policies and practices that impact upon available accommodations that an employer may be willing to make for its general workforce.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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New Jersey Bans Hair Discrimination

On December 19, 2019, New Jersey Governor Phil Murphy signed into law a bill which now makes it illegal to discriminate based upon hairstyles associated with race. The law, known as the “Create a Respectful and Open Workplace for Natural Hair Act” or “CROWN” for short, amends the New Jersey Law Against Discrimination (“LAD”)’s prohibitions to now bar discrimination based upon “traits historically associated with race,” including hair texture and “protective hairstyles,” defined under the law as styles such as dreadlocks, braids and twists. According to the Senate Judiciary Statement reporting favorably on the bill: “The change is intended to remove any confusion or ambiguity over the scope of the LAD and its applicability to race discrimination predicated on such traits.” With its passage, New Jersey becomes the third state in the country (along with California and New York) to ban such discrimination. The law was passed on the one year anniversary of a high school wrestling incident where a New Jersey African American student could not wrestle in a match unless his dreadlocks were either covered or cut.

In light of this new law, which takes effect immediately, employers should review their workplace personal appearance policies to ensure that their policies withstand legal scrutiny under these new requirements. One critical question left unanswered by the new act is whether restrictions can continue to be placed upon hair style or hair length for safety reasons, say when an employee works around heavy machinery or around food in the food industry. It therefore remains to be seen whether such previously acceptable limitations on hairstyles and length will still be permitted under the new law.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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Employer Social Media Searches-Beware Of What You Wish For!

Thanks to the internet, employers have access to more and more information about their employees and prospective employees than ever before. And most employers love that so much information is now available to them to guide their hiring practices.

Recently, I have gotten multiple questions from clients asking whether it is a smart thing for them to incorporate social media searches into the scope of their usual background checks on employees and prospective employees. My repeated advice is that employers must proceed with caution in this area that, for a variety of reasons, is fraught with the potential for legal peril.

Initially, if planning to look at social media sites, employers must be aware that New Jersey has a law which prohibits employers from demanding from employees or prospective employees that they supply their passwords so that the employer/prospective employer can access password protected private social media areas. While such private social media areas are protected and off limits, publically accessible information on the internet is not, and the law says that employers/prospective employers can consider what is publically accessible in areas where password access is unnecessary. But, as discussed below, there are looming legal dangers lurking even in those publically accessible areas of the world wide-web.

Moreover, employers who do any sort of a background check on employees and /or prospective employees must also ensure that they comply with the Federal Fair Credit Reporting Act (“FCRA”).  Under the FCRA, an employer seeking to do a background check on an employee/prospective employment candidate must meet certain consent and disclosure requirements if the employer will be using an outside consumer reporting agency to conduct the search. Thus, if the employer uses an outside company to conduct the social media search, then compliance with the written consent and disclosure obligations of the FCRA will need to be followed. The outside consumer reporting agency will typically supply those necessary forms for the employer’s use to give to an employee/prospective employee before the search occurs, but I would recommend that a quick legal review of the paperwork be done by counsel to make sure the supplied documents are compliant with the FCRA.

Alternatively, if an employer plans to do a search of social media sites itself, it need not meet the requirements of the FCRA.

Nevertheless, whether utilizing either of the above referenced methods, doing searches of an employee/candidate’s social media sites can place an employer in a precarious situation.  For one thing, there is a lot of maliciously planted information about persons on the internet so the searcher must be very careful in sifting through what is truthful (and what is not truthful) information about a candidate.  Moreover, sometimes, the employer will learn things about a candidate on the internet that it is legally prohibited from knowing during the interview process, and this could lead to unexpected trouble for the employer.

For example, under the law, you cannot ask prospective employment candidates whether they either have a disability, or to disclose their age. By searching social media sites, the prospective employer can, even if not explicitly seeking such information, unwittingly gain knowledge of such prohibited information that should legally have no bearing on the hiring decision. The danger in that scenario lies in the following: if the prospective employee is ultimately denied employment, and learns that the employer found out things about him/her by doing a social media search that reveals legally off limits information like the above, the prospective employee might conclude that consideration of the prohibited information led to the adverse employment decision, even when it did not, and now the employer is embroiled in an unwanted failure to hire lawsuit. No employer would want to find itself in that type of situation ever.

Similarly, here is another common example of an employer web search that could also cause unexpected legal problems. While legally it might be appropriate for the employer to search for current and past civil law cases involving the candidate in a public area of the internet, if the employer decides to not hire the candidate because of a previous lawsuit filed under, say the New Jersey Law Against Discrimination (“NJLAD”), the employer now could be sued for retaliation for withholding a job offer because the prospective employee exercised a protected right to file suit under the NJLAD. Again, another unwanted (and unexpected) situation for an employer.

As these examples therefore show, any employer doing social media searches must do them carefully to avoid the possibility of this kind of unwanted legal peril. If an employer still wants to do social media searches despite knowledge of the above risks, here are some recommended guidelines.

First, access social media sites only after the candidate is interviewed and only if truly interested in that candidate.  Second, the employer must be consistent in conducting such searches-if you do it for one candidate, they have to be done for all candidates. Inconsistent and selective use of searches could otherwise give rise to discrimination claims.  Third, document what is considered (and by implication what was not considered.)  Fourth, the employer must verify the information obtained before using it, especially where the information comes from a third party site as opposed to the candidate’s own site. Finally, the search function itself should be centralized and performed as an integrated part of the overall background check.  In this regard, HR is the best positioned in the company to oversee such search activities. Furthermore, just as critically important, there should likewise be no searches conducted independently by hiring managers or anyone else so the employer has centralized control over the process.

Following the above guidelines should help in controlling the potential problems that could arise from the use of social media search efforts.  But, in the end, and as counterintuitive as it may seem, the most legally effective way of avoiding unwanted problems in this area may actually be fighting the employer’s pressing urge to want to  learn too much about a potential employee/prospective employee’s background.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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It’s Abuse (FMLA) I Tell You!

Since the Federal Family and Medical Leave Act (“FMLA”) was passed back in 1993, employers have frequently worried about one overarching issue: FMLA abuse and fraud.  Just recently I had a client ask: what can an employer do when it suspects that an employee is lying about the need for FMLA leave? I tell employers to fear not, and not fret, because there are in fact legal tools available to them to weed out FMLA fraud.

Under the FMLA, before an employee can get FMLA leave, the employee must obtain supporting medical information from a health care provider to justify the need for leave.  Typically, employers receive a signed medical health certification form from the health care provider, which is a form prescribed for such use by the US Department of Labor. This is the first place to look to detect fraud. Closely scrutinize the form to determine whether the health care provider actually provides support for the medical diagnosis for which the employee is seeking leave. Where there are discrepancies between what the health care provider indicates and what you are being told by the employee, the employer should follow what the health care provider notes in the form rather than what the employee is telling you. This way, the employer can weed out any misinformation being provided by the employee to justify a leave.

The second-place on the form that should be evaluated is the nature of the leave that the health care provider is prescribing for the employee. Look to see exactly how much time the health care provider believes the employee needs to be out of work, and when, especially if intermittent leave is sought by an employee. For example, where the employer finds that the employee is spending more time out of work on intermittent leave than what the health care provider has indicated is necessary on the form, this is a telltale sign of possible abuse. So, what can the employer do in such circumstance? For one thing, the employer can ask for a recertification form from that physician/health care provider if the pattern of use is different from what was previously prescribed. FMLA regulations provide this tool to the employer to control possible abuse by alerting the health care provider that the employee is using the leave in a way which is different than what was originally recommended and prescribed.

Another tool available in a suspected fraud situation is requesting a second opinion so that another health care provider paid by the employer can evaluate whether there is in fact the need at all for the FMLA leave. Where the second opinion differs from the original health care provider’s certification supporting the leave request, the FMLA statute and regulations provide for the obtaining of a third opinion, which is binding on both the employer and employee, and this becomes the final determination on whether leave is authorized. The final health care provider is chosen collectively by both the employee and employer. Clients of mine have used this method to stop potential FMLA fraud/abuse in its tracks where the employer reasonably suspected due to the circumstances presented that the requested leave was not needed by the employee.

Aside from the foregoing mechanisms, employee fraud has also actually been discovered through searches of the Internet and publicly available social media sites of the employee. Where an employer suspects fraud, taking a look on the Internet and conducting searches on the employee, especially on the publically accessible portions of social media site areas such as Facebook, can provide important information corroborating suspicions of fraud. In one reported case, an employee’s FMLA fraud was discovered from pictures posted by the employee on the Internet from a tropical island where the employee was vacationing at a time when he was out on FMLA leave. The employee tried to justify the vacation by arguing that his health care provider prescribed it to deal with the stress condition that prompted the request for FMLA leave, but the court did not buy that argument.

Sometimes, information about FMLA fraud will likewise come from co-employees who will report a violation because they too are upset that the employee is not at work. Similarly, I have had cases where an employee’s own relative reported the fraud in requesting FMLA to the employer so corrective action could be taken. In other extreme situations, private investigators can be used to monitor the daily activities of the employee to see whether the leave is truly needed.

The FMLA is very clear on this issue: fraud is not something that an employer must accept, and utilizing the tools available under the act will enable the employer to ferret out illegitimate requests for leave. Where fraud is discovered, employers have every right to take disciplinary action against the employee, including termination, as the employer did in the case involving the illicit vacation scenario mentioned above. So, if you are facing a situation where fraud is suspected, conduct an investigation, which sometimes will require that the employer directly confront the employee with the allegations. Employers will be amazed at how well you can guard against and remedy FMLA fraud by using the very mechanisms made available under the law and its accompanying regulations for combating such illegitimate practices.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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US Department of Labor Announces New Overtime Rules

Just a few years ago, employers were preparing to follow what were to become new overtime rules that were going into effect near the end of the Obama administration.  Those rules were sidetracked by an unexpected court ruling that struck the new rules down and declared them to be unenforceable. Since that time, employers have been waiting on what, if anything, the United States Department of Labor (“USDOL”) would do with this issue with a new administration in power in Washington, D.C. We received that answer this week on September 24, 2019 when the USDOL promulgated new final rules that will apply to overtime eligibility determinations starting in 2020.

The new provisions update the Fair Labor Standards Act’s (FLSA) regulations and minimum salary thresholds needed for executive, administrative, and professional employees to be exempt from overtime. These final rules will go into effect on January 1, 2020.

Here are the changes that are being made by the new rules:

  • The standard salary threshold for classifying an employee as exempt from overtime increases to $684 per week ($35,568 annually), up from $455 per week ($23,660 annually).
  • The minimum salary threshold for the Highly Compensated Employee (HCE) exemption increases to $107,432 annually, up from $100,000.
  • Nondiscretionary bonuses, incentive pay, and commissions, may make up to 10 percent of this standard income threshold, as long as they are paid at least annually.
  • Special salary levels for workers in United States territories and the motion picture industry will be revised.

So, what should employers do while waiting for the new rules to go into effect?  Like many employers did when the overtime rules were expected to change during the Obama administration, employers should conduct an audit of its workforce and determine how these regulations might affect your current payroll practices. It is believed by the USDOL that, due to these new regulations, an additional 1.3 million employees will be now eligible for overtime. Therefore, if you have employees who were classified as exempt because of their meeting the older salary test standard, employers will now need to decide if they want to raise what those employees are being paid to the higher 2020 salary level to maintain the exemption or reclassify those employees as non-exempt moving forward.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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New Jersey’s Groundbreaking New Wage Anti-Theft Law

In the past, employees who believed that they were not properly paid in line with minimum wage and overtime pay requirements under New Jersey’s wage payment law could either bring a lawsuit in state court or file an administrative claim with the New Jersey Department of Labor to recoup unpaid wages. Many politicians and leading legal activists have dubbed an employer’s failure to properly pay employees owed wages as “wage theft,” and vociferously campaigned for stricter enforcement laws to benefit employees in their quest to fight such “wage theft.”  On August 6, 2019, new legislation was passed, giving employees here in New Jersey new legal tools to fight against this claimed “wage theft,” and then some.

On that date, New Jersey’s Acting Governor Sheila Oliver signed a new anti “wage theft” law that drastically expands the fines, penalties, and damages to be imposed for violations of the state’s wage payment law, and similarly extends the statute of limitations for bringing such claims from two to six-years. The new law takes effect immediately. These changes are groundbreaking and require employers to take prompt actions to audit payroll practices to ensure that these significant new legal requirements are not applied adversely against your company.

Expanded Civil and Criminal Penalties

One of the most important changes made by the new law is the availability of liquidated damages for wage payment violations. Violators are now required to pay the wages owed to the employee plus liquidated damages equal to 200% of the wages owed. Liquidated damages can be avoided, however, for a first time violation if the employer can show that (a) the violation was an inadvertent error made in good faith, (b) the employer had reasonable grounds for believing that the payroll action taken was not a violation of wage and hour requirements, and (c) the employer acknowledges the violation and pays the wages owed within 30 days of the notice of violation. In addition to the possible awarding of liquidated damages, the new law also sets fines of $500 and 20% of the owed wages for a first offense. Fines increase to $1,000 and 20% of the owed wages for each subsequent offense. Additional administrative penalties up to $250 for a first violation and $500 for each subsequent violation can likewise be assessed by the New Jersey Department of Labor and Workforce Development.

In addition to employer civil fines, penalties, and civil damages, the law similarly allows for the imposition of criminal penalties. Significantly, any corporate officer or employee responsible for the wage payment violation commits a disorderly person’s offense. A first violation comes with a fine of $500 to $1,000 or jail time of 10 to 90 days, or both a fine and jail. For subsequent violations, the fines can range from $1,000 to $2,000 and jail time could be imposed from 10 to 100 days. Thus, the law expressly allows for the simultaneous imposition of both a fine and jail time. Employers who violate the bill three or more times are deemed to be guilty of a new third-degree crime of “pattern of wage nonpayment.” Also, in a first in wage collection matters, employees who bring suit can now recover both reasonable attorneys’ fees and costs against the offending employer in having to file a wage collection claim.

The law likewise opens the door for expanded New Jersey Department of Labor and Workforce Development wage and hour payment audits. Under the law, employers may be made subject to a wage payment audit as an alternative to, or in addition to, any of the above referenced sanctions. If that audit ultimately reveals additional violations, the employer and corporate employees involved in the wage payment violation may likewise be subject to additional fines, penalties, damages, and jail time, as well as additional audits. The New Jersey Department of Labor and Workforce Development is also similarly granted the express authority to issue a stop work order or permanently revoke an employer’s operating licenses for repeat violations.

Strict Anti-Retaliation Protection

Along with its expanded civil and criminal penalties, the act also contains very strict anti-retaliation protections for employees who file wage claim complaints. In a drastic change from prior law, it will now be presumed that retaliation has occurred if an adverse action is taken against an employee within 90 days of the filing of a wage complaint. Retaliation against an employee who files a wage payment complaint also subjects a corporate employer to a disorderly person’s criminal offense and the potential imposition of employer fines in the range of $100 to $1,000, plus payment of wages lost as a result of the retaliation and liquidated damages of 200% of the wages lost.

In addition, if an employee is discharged in retaliation for filing a wage payment complaint, the employer is required to offer reinstatement, unless prohibited by law, along with all lost wages as a result of that discharge, which likewise is a quite radical change in how the law operated previously.

Other Prominent Legal Changes

The law‘s coverage is quite broad and is not just limited to failure to pay wages. It applies to both the failure to pay compensation and benefits, which includes health benefits, pensions, medical treatment, disability benefits, and workers’ compensation. In addition to the expanded scope of what is covered under the law, an employer’s failure to provide sufficient employee records in response to an employee’s wage claim now results in a rebuttable presumption that the employee worked for the employer for the period of time asserted and for the amount of wages alleged in the employee’s claim.

Moreover, as part of its incredible expansive approach, the new law similarly imposes joint and several liability on both an employer and a labor contractor providing workers to the employer. This liability cannot be waived or contractually shifted from the employer to the labor contractor.

Finally, in what will likely be deemed a quite controversial aspect of the new law, violations and names of violating employers will be made public on a government website.  Employers will also be required to provide new hires and employees with a written copy of a statement of their rights under New Jersey’s wage-and-hour laws, and an explanation of how to file a claim or take other action in the event of an alleged violation, which is one more added responsibility that applies to orienting new employees to a company.

Next Steps for Employers

As the instant summary shows, the legal modifications made by this new law to the wage collection process are game changing and should concern all employers moving forward.  At a minimum, employers must start internally auditing its payroll practices to ensure that employees are being properly paid and are correctly classified to avoid possible overtime payment violations. Thus, in light of this new law, employers must be even more proactive in keeping in step with wage and hour compliance, and obtaining effective legal advice will help employers meet such requirements in this always changing New Jersey legal environment.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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New Jersey Restricts Pre-Hiring Consideration of Salary History Information

On July 25, 2019, New Jersey became the latest of a growing number of states that now prevent employers from requesting salary history information about applicants as part of the pre-hiring process.  The new law bars employers from screening a job applicant based upon an applicant’s salary history or requiring that the applicant’s salary history be disclosed or satisfy any minimal or maximum criteria.  As part of the law’s legislative history, several sponsors indicated that this law is designed to help enforce the mandates of the state’s Equal Pay Act that was passed a few years ago.

While employers may not request salary history information, salary information may still be considered if the applicant, without employer prompting or coercion, voluntarily provides such information to the employer.  An applicant’s refusal to voluntarily provide such information cannot be considered in the making of any employment decisions. Moreover, the law also allows employers to request that an applicant provide a written authorization to confirm salary history after an offer of employment that includes an explanation of the overall compensation package has been made to the applicant.

The law does not apply in the following situations: (1) to internal transfers or promotions within an employee’s current employer, or use by the employer of previous knowledge obtained as a consequence of prior employment with the employer; (2) to any actions taken by an employer pursuant to any federal law or regulation that expressly requires the disclosure or verification of salary history for employment purposes, or requires knowledge of salary history to determine an employee’s compensation; (3) to any attempt by an employer to obtain, or verify a job applicant’s disclosure of, non-salary related information when conducting a background check on the job applicant, provided that when requesting information for the background check, the employer shall specify that salary history information is not to be disclosed; and (4) to employer inquiries regarding an applicant’s previous experience with incentive and compensation plans and the terms and conditions of those plans, provided that the employer shall not seek or require the applicant to report information about the amount of earnings of the applicant in connection with those plans, and that the employer shall not make any inquiry regarding the applicant’s previous experience with incentive and commission plans unless the employment opening with the employer includes an incentive for compensation component as part of the total compensation program.

Furthermore, if an employer does business in other states besides New Jersey, an employer may include a question about salary history on a job application, but it must expressly indicate that if the applicant is seeking a position in New Jersey, the applicant need not answer the salary history inquiry.

Any employer who violates the law shall be liable for a civil penalty in an amount not to exceed $1000 for the First Violation, $5000 for the Second Violation, and $10,000 for each subsequent violation. The fine is collectible by the New Jersey Commissioner of Labor and Workforce Development in a summary proceeding pursuant to the New Jersey Penalty Enforcement Law.

Finally, while the new law precludes an employer from requesting salary information from an applicant, an employer is not prohibited from acquiring salary history information that is publicly available, but an employer cannot retain or consider that information when determining salary, benefits, or other compensation of the applicant, unless the applicant voluntarily, without employer prompting or coercion, provides the employer with salary history.

This new law does not go into effect until the first day of the sixth-month next following enactment. Accordingly, employers have until January 1, 2020 to bring its pre–hiring practices in line with these new requirements.  Thus, employers should begin today to revise employment applications, where salary history information is requested, and likewise start to train all persons involved in the pre-hiring process about the prohibition of asking for (and consideration of) salary history information as part of any hiring determinations.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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New Jersey Supreme Court Rules on Significant Unemployment Insurance Eligibility Question

In the course of the employer counseling work that I do in my labor and employment practice, clients ask a lot of questions regarding New Jersey’s Unemployment Compensation Law, especially about the grounds that are available to an employer to challenge employee eligibility for unemployment benefits.

One of the most common grounds for employer challenges is that the employer voluntarily left his/her employment without good cause for doing so. The New Jersey Supreme Court issued an interesting decision in McClain v. Bd. of Review, 2019 N.J. LEXIS 538 (2019) regarding that question which presented a novel twist: what happens to eligibility when an employee resigns his/her former employment to take a new job, but that job opportunity is thereafter lost through no fault of the resigning employee?

The New Jersey Supreme Court took up the foregoing issue because two different appellate panels when faced with that question reached divergent conclusions.  In the McClain case, the appeals panel held that there was no disqualification of benefits because the job offer that was presented to McClain that prompted her resignation was rescinded through no fault of McClain.  In the second case, Blake v. Bd. of Review, another appeals panel ruled to the contrary, declaring that, to be eligible for unemployment benefits, the employee had to actually begin working for the new employer before losing the job.  Since that did not happen because the job in that case was also rescinded pre-employment commencement, there was no eligibility for benefits.

In finding that McClain and Blake was eligible for benefits, the New Jersey Supreme Court focused on a part of the unemployment compensation law that made employees eligible for benefits where the employee worked for a substantial period of time with one employer and then left for an equal or better opportunity with another employer but was later terminated shortly after starting that employment.  While noting that both appeals panels presented plausible interpretations of the foregoing part of the unemployment compensation law, the Court ultimately viewed the McClain’s panel’s decision as more appropriate because it was in line with the remedial purposes of the law, which required a liberal analysis in favor of benefit eligibility. That decision was likewise more consistent with the reason for including the foregoing provision in the unemployment compensation law, which namely was to allow for benefit eligibility where employment was lost due to no fault of the employee.

The McClain decision shows that, while not every employer challenge to an unemployment compensation petition will succeed, it nevertheless can be a worthwhile endeavor because the law includes a number of grounds where eligibility for benefits can be denied. That can work to the benefit of the former employer to ensure that wrongful credits for the payment are not taken against their employer unemployment compensation account rating.

 


Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.

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