Compliance Watch:
Penalties for Breaking New Jersey Labor Laws

April 11th 2024

New Jersey’s flourishing economy has positioned it as a prime location for business expansion and innovation, drawing in substantial investments from both established corporations and emerging ventures. And as the state continues to foster economic development, it becomes increasingly critical for employers to familiarize themselves with the legal framework governing labor practices and the penalties for breaking New Jersey labor laws.

New Jersey has a comprehensive set of labor laws in place to protect the well-being of its workers. These laws cover various aspects of employment, including minimum wage, overtime pay, workplace safety, discrimination, and more.

Adhering to these laws is crucial for maintaining a fair and equitable work environment and saving your business from unnecessary legal trouble.

This Article Covers

Most Common Labor Law Violations in New Jersey
Penalties for Breaking New Jersey Labor Laws
How You Can Avoid Violating New Jersey, Labor Laws

Most Common Labor Law Violations in New Jersey

Despite the labor law regulations set by the state, certain violations remain alarmingly common. Here’s a look at the violations that several employers in New Jersey either knowingly or unknowingly commit:

  • Not paying for overtime: This is a common labor law violation across the US, and New Jersey is no exception. In a recent report released by the US Department of Labor, federal investigators discovered that three supermarkets in northern New Jersey intentionally neglected to compensate 226 employees for their overtime work at locations in Hackensack, Oakland, and Waldwick. These employers have been compelled to pay over $1.8 million in back wages and damages.
  • Misclassifying employees as independent contractors: Employee misclassification has been a growing issue in the state. It’s a common tactic some employers use to avoid providing benefits and protections that come with being a regular employee. In a state audit conducted in 2020, it was discovered that 7,149 workers had been misclassified. And these numbers only represent just 1% of businesses in the state.
  • Violating workplace safety protocols: New Jersey has regulations and guidelines to ensure employees a safe working environment. But despite these safeguards, some employers still violate workplace safety protocols. According to the Bureau of Labor Statistics, private industry employers in New Jersey reported 75,800 nonfatal workplace injuries and illnesses in 2020. This resulted in an incidence rate of 2.9 cases per 100 full-time equivalent workers. In the same year, 82 work injuries resulted in fatalities.

A wooden gavel and block surrounded by dollar bills. Photo by Sasun Bughdaryan on Unsplash

Penalties for Breaking New Jersey Labor Laws

New Jersey employers must adhere to the state and federal laws applicable to their business. If they don’t, they can face the various penalties for breaking New Jersey labor laws which range from fees, suspensions, and even criminal charges. As they say, don’t do the crime if you can’t do the time (or, in some cases, pay the fine).

New Jersey Minimum Wage Laws

New Jersey saw an increase in the minimum wage on January 1, 2024 to $15.13 per hour, which is greater than the federal hourly minimum wage rate of $7.25. This change is a result of the legislation signed by state governor Phil Murphy in February 2019, which aimed to gradually increase the minimum wage to $15 per hour by 2024 for most employees.

“This increase will greatly improve the lives of countless New Jerseyans and ensure that hardworking people across our state are paid a living wage.” – New Jersey Governor Phil Murphy.

Not all workers in New Jersey are eligible for the set minimum wage, though. Some exceptions to the minimum wage include outside salespersons, part-time employees primarily engaged in the in-home childcare, and minors under 18.

Tipped workers like bartenders and waiters are also subject to a different minimum wage. In New Jersey, tipped workers are defined as those who receive more than $30 in monthly tips regularly. Even if they only occasionally receive tips, they still qualify as tipped employees.

Employers can pay tipped workers a minimum wage of $5.26 per hour, but their total earnings, including tips, must reach at least the state minimum wage of $15.13 per hour. If their total pay falls short, the employer is responsible for making up the difference.

Penalty for Violation

Employers who violate the Minimum Wage regulations in New Jersey can be charged with a disorderly person violation and, upon conviction, be fined between $100 and $1,000. 

Additionally, the Commissioner has the authority to impose administrative penalties of up to $250 for a first violation and up to $500 for each subsequent violation. The employer must also pay the Commissioner an administrative fee, ranging from 10% to 25% of any payment owed to employees.

Overtime Laws

Nonexempt employees in the state are entitled to overtime pay, which is 1.5 times their regular rate for all hours worked over 40 in a week. However, New Jersey does not mandate overtime pay for Saturdays, Sundays, holidays, or regular rest days. This will rely on the company’s policies.

Certain workers are exempt from receiving overtime pay. This includes most railroad employees, truck drivers, outside salespeople, those who meet the federal salary level test, and supervisory workers whose primary duty is management. These exceptions are closely similar to those outlined by the Federal Labor Standards Act.

Learn more in detail about New Jersey Overtime Laws.

Penalty for Violation

If an employer knowingly and willfully violates any provision of New Jersey’s wage and hour regulations, they will be charged with a disorderly person’s offense. Upon conviction for a first violation, they can face a fine ranging from $100 to $1,000, imprisonment for 10 to 90 days, or both fine and imprisonment.

New Jersey Law Against Discrimination (NJLAD)

NJLAD is a highly extensive anti-discrimination law that covers various areas. Under this law, discrimination and harassment based on protected characteristics like race, creed, color, national origin, nationality, ancestry, age, and sex, are strictly prohibited in areas like employment, housing, and places of public accommodation. 

These regulations protect employees from discriminatory practices throughout the employment process, from hiring and promotions to compensation and termination.

NJLAD also protects employees who report discrimination or participate in harassment investigations. The law prohibits employers from retaliating against their employees for engaging in protected activity, such as making complaints or participating in investigations.

Penalty for Violation

Any person who violates the New Jersey Law Against Discrimination may face penalties as follows:

  1. Up to $10,000 if no prior violation has been committed within the past five years.
  2. Up to $25,000 if one prior violation has been committed within the past five years.
  3. Up to $50,000 if two or more violations have been committed within the past seven years.

The director will determine the specific penalty amount based on the circumstances and include it in the order following the finding of unlawful discrimination or employment practice. And the collected penalties will be promptly deposited into the State Treasury for general purposes.

Conscientious Employee Protection Act (CEPA)

CEPA is a comprehensive whistleblower law in New Jersey. It safeguards employees from retaliation, such as termination, demotion, denial of promotion, or harassment, when they raise concerns about actions they reasonably believe are illegal.

This Act prohibits employers from retaliating against employees engaged in a wide range of “protected activities.” These activities include objecting to or refusing to participate in actions that the employee reasonably believes:

  1. Violate the law or legal regulations.
  2. Are fraudulent or criminal.
  3. Conflict with legal requirements related to public health, safety, welfare, or environmental protection.

Furthermore, CEPA safeguards employees who provide information or testify before a public body investigating or inquiring about potential violations of the law by the employer or other individuals.

Penalty for Violation

Under CEPA, various damages and remedies are available to victims of workplace discrimination. These include reinstatement to the job, compensation for lost wages and employee benefits, damages for emotional distress, and punitive damages. Furthermore, employees can also seek reimbursement for their attorneys’ fees from the employer.

Child Labor Laws

New Jersey allows people under 18 to work, permitting them to obtain an employment certificate, also called an “A300 Combined Certification Form.” The New Jersey Department of Education or the Department of Labor and Workforce Development provides these forms.

To help keep minors safe, there are limitations in place regarding work hours, and the occupations minors are allowed to work in.

For workers aged 16 or 17, they can only work up to 40 hours per week, with a maximum of 8 hours per day on a school week. They also can’t work before 6 a.m. or after midnight on Fridays and Saturdays.

Children aged 14 or 15, on the other hand, can be allowed to work no more than 18 hours per week and no more than three hours per day on school days. They shouldn’t be allowed to work before 7 a.m. or after 7 p.m.

Minors under 18 in New Jersey are prohibited from:

  • Using power-driven woodworking machinery
  • Operating grinding and polishing machines
  • Working with dangerous chemicals
  • Being near pools or billiard rooms
  • Operating punch presses and stamping machines with over ¼ inch clearance
Penalty for Violation

The Commissioner has the authority to impose administrative penalties on employers who violate Child labor laws. The penalties are as follows:

  1. First violation: Not exceeding $250
  2. Second violation: Not more than $1,000
  3. Each subsequent violation: Not more than $2,500

When determining an appropriate penalty for violations, the Commissioner takes into account various factors. These factors include the seriousness of the violation, the employer’s history of previous violations, the employer’s good faith, the size of the business, and any other relevant factors deemed appropriate by the Commissioner.

Occupational Safety and Health Act (OSHA)

In New Jersey, there are laws that control workplace safety for both federal and state employees. One of these laws is called the Occupational Safety and Health Administration (OSHA), which is a federal law that makes sure employees have safe and healthy working conditions.

OSHA classifies workplace hazards into four categories

  1. Physical Hazards: Includes excessive exposure to sunlight or ultraviolet rays, extreme temperatures, radiation exposure, and excessive noise.
  2. Chemical Hazards: Related to exposure to cleaning products, fuels, solvents, flammable materials, and pesticides.
  3. Biological Hazards: Connected to viruses, bacteria, and other microorganisms that can make people sick, like hepatitis and tuberculosis
  4. Ergonomic Hazards: Involves physical factors like repetitive motions and heavy lifting that can lead to muscle and bone disorders.

OSHA also recognizes other types of hazards like electrical, fire, and explosive risks, but they usually fit into one of the four main categories. By understanding and recognizing these different types of hazards, employers can take appropriate steps to keep their workers safe and prevent accidents and injuries at work. Inspections are done regularly to make sure safety standards are being met.

For public employees, there is a law called the New Jersey Public Employees Occupational Safety and Health (NJPEOSH) Act that makes sure safety standards are followed. Under this Act, each employee can report workplace hazards anonymously to their employer or NJPEOSH authorities. Complaints can also be made to request a safety inspection. NJPEOSH enforces standards for things like asbestos in construction and general industry, hazardous waste, indoor air quality, lead in construction, and occupational noise.

Penalty for Violation

As per Section 17 of the OSHA Act of 1970, an employer found to be intentionally or repeatedly disregarding the provisions outlined in OSHA or orders established in accordance with the Act may face a civil penalty ranging from $5,000 to a maximum of $70,000 for each violation. The minimum penalty is $5,000 for each willful violation.

New Jersey Family Leave Act (NJFLA) 

The New Jersey Family Leave Act allows eligible employees to take up to 12 weeks off work within 24 months. This leave specifically applies to workers employed by companies with a minimum of 30 employees.

To qualify, employees must have worked for their company for at least one year and completed at least 1,000 hours of work in the previous year. Reasons for taking this leave include caring for a newborn, adopting or fostering a child, or tending to a family member with a serious health condition. However, if employees require time off due to their medical condition, they should utilize the federal Family and Medical Leave Act.

Penalty for Violation

Employers who violate NJFLA may face a penalty of up to $2,000.00 for the first offense and up to $5,000.00 for each subsequent offense. The penalty will be collected through a summary civil action in the name of the Attorney General, in accordance with “the penalty enforcement law,” along with other available legal remedies and affirmative actions.

Recordkeeping Laws

In New Jersey, employers are responsible for maintaining accurate employee records. The law allows them to use any timekeeping system as long as it accurately records all necessary information.

Employee records should include the following details:

  • Employee’s name
  • Employee’s address
  • Employee’s birth date (if under 18 years old)
  • Total hours worked by the employee on a daily and weekly basis
  • Employee’s earnings, including regular hourly wage, itemized deductions, and payment basis
  • Total gratuities received by entitled employees
  • Daily or weekly reports completed by gratuity-receiving employees, containing their personal information, employer’s information, the period covered, and total gratuities received
  • Documentation supporting any claimed credit for food or lodging provided as a cash substitute, including cost details and depreciation information for assets related to lodging provision.

These wage and hour records must be retained for six years and can be kept at the place of employment or a central office located in New Jersey.

Penalty for Violation

If an employer intentionally refuses to provide requested records and information to the Commissioner or falsifies records, they will be considered guilty of a misdemeanor. Upon conviction, they may face a fine ranging from fifty dollars ($50.00) to two hundred dollars ($200.00).

How You Can Avoid Violating New Jersey, Labor Laws

Labor law compliance doesn’t have to be rocket science. Here are some simple proactive steps that can go a long way in helping you avoid violating New Jersey labor laws:

Tip #1 Stay Informed

The first step of avoiding penalties for breaking New Jersey labor laws is to equip yourself with essential knowledge of the state’s legal landscape. Stay updated on the latest labor laws, regulations, and any amendments made to existing laws. 

Regularly review official government resources, such as the New Jersey Department of Labor and Workforce Development, to stay in the loop. These are where the local government usually makes announcements.

Tip #2 Establish Clear Policies

Clearly communicate your company’s policies to employees through well-written employee handbooks or manuals. Ensure that these policies are in line with New Jersey labor laws. Your policies should cover various aspects, such as anti-discrimination and harassment policies, employee leave rights, wage and hour policies, and procedures for filing complaints or grievances.

Tip #3 Maintain Accurate Employee Records

Maintain detailed and up-to-date records for each employee, including their personal information, employment contracts, wage rates, hours worked, overtime hours, and any other relevant documentation. Using time tracking software can do wonders to easily and accurately keep track of employee work hours. These tools help eliminate errors associated with manual data entry.

Adhering to proper recordkeeping practices ensures transparency and facilitates compliance with wage and hour regulations, taxation, and other legal requirements.

You’ll want to ensure that all these records are up-to-date, properly organized, and readily accessible in case of an inspection or audit.

Tip #4 Provide a Safe Work Environment

New Jersey employers have a legal obligation to provide a safe work environment for their employees. Follow the guidelines and regulations established by OSHA or the New Jersey Public Employees Occupational Safety and Health (PEOSH) program, whichever applies to your business.

Accidents can be avoidable if you regularly inspect and maintain equipment, provide appropriate safety training, and promptly address any potential hazards. It also helps to establish protocols for reporting workplace accidents, injuries, or hazardous conditions and take corrective actions to ensure employee safety.

Tip #5 Seek Legal Guidance

If you are uncertain about applying or interpreting any labor law in New Jersey, it is advisable to seek legal guidance. Consult an attorney specializing in employment law to ensure that your policies, practices, and procedures comply with all applicable laws and regulations. An attorney can provide valuable guidance and help you address any specific concerns related to your business.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.

Most Read