TRENTON – Legislation sponsored by Senate Majority Leader Loretta Weinberg and Senator Linda Greenstein to prevent wage theft by employers in New Jersey, a practice which often affects some of the lowest paid and most vulnerable workers, was approved today by the full Senate. It now goes to the governor’s desk.
“Workers who are most at risk of wage theft are often times among our most vulnerable populations,” said Senator Weinberg (D-Bergen). “Our current laws are not strong enough to prevent this kind of conduct by unscrupulous employers. We hear that in some cases those who violate the law consider the risk of getting caught and accepting the penalty the ‘cost of doing business.’ Strengthening our laws will better ensure that companies are not taking advantage of workers, and that employees are paid the wages they are owed.”
“Wage theft is a crime that often is perpetrated against workers who feel they have limited recourse to challenge this abusive practice,” said Senator Greenstein (D-Middlesex and Mercer). “This bill will strengthen enforcement of the law and penalties for violations, but it will also give victims of wage theft improved options to recoup lost wages and benefits.”
Wage theft can include failing to pay the minimum wage, overtime rates or withholding payment for work performed. According to a 2013 New Labor household survey of low-wage workers in New Brunswick, one in six workers reported that wage theft had occurred to them in the previous two years; 85% of those individuals were unable to recover the lost wages. In addition, a 2011 Seton Hall University School of Law report from the Immigrants’ Rights/International Human Rights Clinic found more than half of its respondents were paid less than promised at least once in 2010, almost all were not paid overtime when they worked more than 40 hours a week, and almost half were not paid at all at least once.
Under current state law, victims of wage theft can challenge the loss of wages of up to $30,000 in proceedings before the Department of Labor and Workforce Development Division of Wage and Hour Compliance. If the lost wages exceed that amount, the claimant must either forfeit the amount above the $30,000 threshold or file a civil lawsuit to seek compensation. A victim is only eligible to recover the amount of wages lost.
The bill would strengthen state laws. Key provisions of the bill (S-1396) would provide triple damages to wage theft victims – the wages owed plus liquidated damages equal to 200 percent of wages owed – and provide additional avenues for individuals to challenge wage theft and recover wages.
An employer or agent of an employer found in violation of the law would be guilty of a disorderly persons offense and, along with triple damages, required to pay additional fines. Wage theft victims would be able to file a civil claim in Superior Court under the bill.
The legislation would empower the state Labor Commissioner to hear cases where the amount in dispute is above the current $30,000 threshold. It would expand the commissioner’s authority to conduct audits of businesses in certain circumstances and to order license suspension and revocation for violations of the law found in court, in addition to current authority to act on violations determined by the department. The commissioner could also issue a stop work order or license suspension if an employer fails to comply with a wage theft case decision.
The bill would extend the current statute of limitations to allow an employee to file a wage claim with the Department of Labor for wages owed up to six years prior – up from the current two-year statute of limitations on claims of unpaid minimum wage and overtime for unknowingly failing to pay wages and three years for knowingly failing to pay wages. It would also enhance retaliation protections and penalties.
Additionally, the state would seek the assistance of community-based and legal services organizations to disseminate information to day laborers, migrant laborers, temporary laborers and other workers regarding the laws, and to help or represent employees in wage theft actions. The legislation would also require employers to provide information to their employees about their rights under New Jersey’s wage laws.
The bill was approved in the Assembly by a vote of 54-22-1 in June. The Senate approved it 24-12.