Federal Court Rules that NJ’s Wage and Hour Law Allows for Filing of Private Overtime Claims

By: Ralph R. Smith, 3rd, Esq.

In a case of first impression, a Federal District Judge has ruled that New Jersey’s Wage and Hour Law allows for a private right of action to be brought by employees for a claim of non-payment of overtime.

The Plaintiff in Thompson v. Real Estate Mortgage Network, Inc., 2015 U. S. Dist. LEXIS 67186 (D.N.J., May 22, 2015) worked as an underwriter for the Defendant.  On behalf of a class of approximately 100 other underwriters, Plaintiff brought suit claiming that Defendant had misclassified their position as exempt and deprived them of numerous hours of overtime because such persons frequently worked in excess of 40 hours per week, including nights and weekends.  Defendants moved for judgment on the pleadings, arguing that the New Jersey Wage and Hour law did not allow employees to bring legal claims for unpaid overtime, contending that the law only allowed for the filing of claims for minimum wage violations.  Along with bringing a claim under New Jersey law, the Plaintiff also sought overtime compensation under the Federal Fair Labor Standards Act (“FLSA”) which, unlike New Jersey’s statute, expressly allowed for the filing of such claims by employees who contend that they have not been properly paid due overtime.

Based upon (1) the language of New Jersey’s law; (2) the broad interpretation of the law previously adopted by New Jersey state courts in interpreting the state law consistent with the FLSA; and (3) the numerous past New Jersey state court decisions that, while not expressly stating so, assumed that such a private right existed by ruling on such overtime claims under New Jersey’s law, the Federal District Court concluded that a private right of action indeed existed. This now means that Plaintiff can continue to pursue her state law claim for unpaid overtime in addition to her FLSA claim on behalf of herself and the requested certified class.

The Court’s decision in Thompson highlights the importance of properly classifying employees as either exempt or nonexempt to avoid potential lawsuits for unpaid compensation.  Employers are wise to constantly monitor the job duties of their employees to ensure that those employees for payroll purposes are properly classified based upon the actual tasks that they are performing.  Regularly conducted desk audits of employee functions are strongly encouraged, and the use of legal counsel in that process maximizes the achieving of the desired result of proper classification. In sum, as Thompson shows, employees (or more apropos, their legal counsel) are always seeking new ways to gain advantages in the workplace, so employers must remain ahead of the curve by ensuring that their workforce is properly being compensated under all applicable wage and hour laws.