Pub. 18 2019-2020 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 13 new jersey auto retailer W W W . N J C A R . O R G New Jersey also passed legislation drastically increasing penalties for employers who fail to pay wages. The new law, which took effect on August 6, 2019, updates New Jersey’s Wage Payment and Wage and Hour laws. The law also increases the statute of limitations from two years to six years to file such claims and creates liability for dealers that use subcontractors. the applicant’s previous earnings in connection with any incentive or commission plan. Fines & Penalties Dealers who violate the new law are subject to civil penalties in an amount not to exceed $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation collectible by the Commissioner of Labor and Workforce Development. The new law also amends the New Jersey Law Against Discrimination ( NJLAD ) and makes it an unlawful employment practice if the applicant is a member of a protected class. An employer who violates the provisions of the law will be subject to remedies available under the NJLAD except for an award of punitive damages. 2. New Jersey’s Anti-Wage Theft Law New Jersey also passed legislation dras- tically increasing penalties for employers who fail to pay wages. The new law, which took effect on August 6, 2019, updates New Jersey’s Wage Payment and Wage and Hour laws. The law also increases the statute of limitations from two years to six years to file such claims and creates liability for dealers that use subcontractors. The legislation also allows employees to bring a cause of action in Superior Court. Under the new law, dealers who fail to pay wages will be liable for the unpaid wages plus 200% liquidated damages, costs, and attorney fees, plus addition- al fines and penalties. In addition to these penalties, “knowing” violations or retaliation against employees are now disorderly person offenses, which subject employers to criminal penalties ranging from $500 to $1,000 and/or imprison- ment of 10 to 90 days for the first offense and fines ranging from $1,000 to $2,000 and/or imprisonment of 10 to 100 days for subsequent offenses. If an adverse action, including termination, is taken against an employee within 90 days of the employee bringing a complaint to the Commissioner of the Department of Labor, or a claim being brought by or on behalf of the employee in court, alleging wage theft, the adverse action is presumed to be taken in retaliation against the employee. If an employer fails to provide the required employee records, there is a rebuttable presumption that the employer owes the amount of wages alleged. The law also establishes a “pattern of wage non-payment” as a third-degree crime, which is punishable by three to five years imprisonment, a fine up to $15,000, or both. Employers are con- sidered to have engaged in a pattern of wage non-payment if they are found to have knowingly failed to pay wages and have been previously convicted of failure to pay wages on two or more prior occasions. Required Notices Dealers are also now required to provide current and newly hired employees a written copy of a statement which will be produced by the Department of Labor of the employee’s rights under the law, with an explanation of how to file a claim or take other actions concerning wage violations. The Act also requires the Commissioner, in consultation with the Administrative Director of the Courts and the Attorney General, to produce an annual report on the enforcement of wage and hour laws with recommendations to improve enforcement and to place on a website information regarding each wage claim in which an employer was found to have violated one or more State wage and hour laws during the preceding period of not less than 12 months. Bottom Line for Dealerships New Jersey dealers now, more than ever, must review and update Job Applications, Job Descriptions, Employee Handbooks and internal HR Policies to ensure compli- ance with all of the new laws. In addition, any individuals involved in the interview or recruiting process must be trained on the new prohibitions in order to ensure compliance with the new salary ban law. The impact of the wage theft legislation is that dealers will pay a high price for failing to pay employees their correct wages. Dealers must ensure that they are complying with New Jersey’s record- keeping requirements and that employees are being properly paid and classified. Dealers engaged in 1099/Independent Contractor relationships should also engage legal counsel to conduct an audit for compliance with the NJDOL’s strict standard and to avoid costly potential civ- il and criminal penalties. Dina M. Mastellone is a Partner at Genova Burns LLC and is the Chair of the Human Resources Counseling & Compliance Practice Group and a member of the Employment Law & Litigation and Criminal Defense, Investigations & Compliance Practice Groups. Brian M. McKeegan is an Associate and is a member of the Labor Law Practice Group. They can be reached at 973-533-0777 and via email at dmastellone@genov- aburns.com and bmckeegan@genovaburns.com.