Articles Posted in Wage and Hour law

The United States has historically been plagued by systematic employment discrimination based on protected characteristics that often take the form of unjustifiable wage disparity. The Diane B. Allen New Jersey Equal Pay Act attempts to curb this practice in New Jersey by placing strict regulations in situations where employers pay their employees disparate wages, and imposing large penalties on employers who violate this statute. Governor Phil Murphy signed the bill into law on April 24, 2018 in hopes of creating a work environment in the state that fosters pay equity. It takes effect, today, July 1, 2018.

The Equal Pay Act amends the New Jersey Law Against Discrimination to strengthen protections against discrimination by specifically prohibiting unfair pay practices based on gender, race, or other characteristics. It restricts employers from paying employees who are members of protected classes reduced wages in comparison to non-protected class employees by making it unlawful for women to be paid less than their male counterparts simply because of their gender. An employer may utilize differing compensation rates only pursuant to:

  • A seniority or merit system

Most people know that it is against the law for employers to not pay their employees their earned wages.  But what if you are not an employee, but instead making a living as a freelance worker.  Because freelance workers are not considered employees, the laws that require employers to pay its employees their wages, such as the New Jersey Wage Payment Act and federal Fair Labor Standards Act, do not apply to freelancers.  While there are some laws such as the Independent Sales Representative Rights Act that protect independent sales representatives from not being paid their earned sales commissions, there is no specific law to protect many freelance workers. As a result, companies are far too often stiffing their non-employees from being paid their earned compensation.

New Jersey lawmakers have recognized this as a serious problem in today’s workforce and are now attempting to pass legislation to protect freelance workers from getting paid their earned compensation.  Assembly Bill No. 1526, approved on May 18, 2018, mandates that contracts between a company and a freelance worker, must now be in writing, and provides for severe penalties against companies for shirking their duty to  pay a freelance worker the compensation they are owed.

The bill requires a client to pay a freelance worker his or her compensation earned according to the work terms agreed to with the client.  If there is no agreement, payment shall be paid no later than 30 days after completion of the work or services performed.  The bill defines the term “client” to be any “sole proprietorship, partnership, corporation, limited liability company, association, other business entity or nonprofit organization in which that business has contracted with a freelance worker for compensation equal to or greater than $600.”

New Jersey is getting closer to becoming the tenth state to enact a paid sick leave law. On Thursday, April 12, 2018, the New Jersey Senate passed  (A1827) and is headed for Governor Murphy’s desk for his signature.  The bill was approved in March by the Assembly.

The legislation would allow workers to accrue one hour of earned sick leave for every 30 hours.   Employees who work for employers with less than 10 employees can accrue up to a maximum of 40 hours per year and employees who work for employers that employ more than 10 employees can accrue up to a maximum of 72 hours per year. Workers would be eligible for paid sick leave after 120 days of employment.

Certain types of employees are exempt from the bill, namely certain construction employees, per-diem health-care workers and public employees who have sick leave benefits in place. Employees who are employed by temporary employment agencies will accrue the benefits based upon the time they are employed with the agency and not for each separate client they are assigned.  The employer must pay the sick leave earned by the employee at the same rate of pay with the same benefits as the employee usually earns.

Less than one week from Opening Day of the major league baseball season, Congress has passed legislation that will exempt minor league baseball players from the wage protections mandated under the federal Fair Labor Standard Act (“FLSA”).  This means that Major League Baseball and Minor League Baseball will not be required to pay their minor league baseball players a minimum wage, any overtime pay, or any compensation for spring training or during the off season.

The legislation will also likely put an end to a pending lawsuit brought by minor league players in which they are attempting to gain the legal wage protections available under the FLSA.  The lawsuit was filed in 2014 by lead plaintiff and former minor leaguer, Aaron Senne, who argued on behalf of himself and other minor league baseball players, that Major League Baseball and Minor League Baseball were violating the FLSA by not paying the players minimum wage and overtime pay.  Most minor league players make less than $7,500 a season and work between 50-60 hours a week during the season without factoring in travel time.  Minor league games take place six to seven days a week and require extensive travel for the players.

The FLSA requires that employers pay covered employees no less than $7.25 for every hour worked.  Most states have similar minimum wage laws in place, such as New Jersey that has enacted the New Jersey Wage and Hour Act.  The New Jersey Wage and Hour Act currently mandates employers pay eligible employees a minimum wage of $8.60 per hour.  The FLSA also requires that employers pay covered employees overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.  The New Jersey Wage and Hour law contains the same provision requiring employees provide eligible employees with overtime compensation.

The U.S. Labor Department has proposed new rules that include increasing the minimum salary threshold level for executive, administrative and professional exemptions and the minimum total annual compensation level for the “highly compensated employee” exemption under the Fair Labor Standards Act.  The new proposal would raise the minimum salary thresholds to $970 a week (i.e. $50,440 a year) from the current $455 per work ($23,660 a year).  The passing of this new rule, which is expected, would amount to a huge victory for employees across the country.

The present $455 salary threshold has not been updated since 2004 and has left certain low salaried managerial or office work workers in an unfair situation of being exempt from receiving overtime pay.  In announcing the proposed overtime rules change, the US Department of Labor specifically identified jobs such as convenience store managers and fast food assistant managers as being required to work 50-60 (or more) hours a week and be compensated as little as $23,660 a year, which is less than the poverty level for a family of four.  These employees can be paid a minimum salary of $23,660, and not be paid any additional compensation for overtime hours worked. It has been estimated the change in law will help 5 million workers become overtime eligible and will increase employees’ wages across the country by $1.3 billion.  The US Department of Labor has submitted the change to the Office Management and Budget (OMB), The OMB has 30 to 90 days to review and then publish the rules in the federal register as final.

In addition to increasing the salary threshold, the US Department of Labor has also proposed to increase the total annual compensation requirement needed to exempt highly compensated employees to $122,148 annually and to establish a mechanism to automatically update the future salary and compensation levels.