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Wage Advice for Workers

This article explains the increase in New Jersey’s minimum wage, important issues for resident domestic and home health workers, and the issue of employees being incorrectly classified as “independent contractors.”

What is New Jersey’s minimum wage?

New Jersey’s minimum wage now has a built-in yearly increase according to the cost of living. The wage increased from $8.38 in 2015 to $8.44 in 2017. Some employers may try to avoid paying minimum wage and overtime wage by paying low-wage workers on a salary. But at the end of the work week, each employee must earn at least minimum wage, and time and a half or overtime premium pay for hours worked over 40 hours. This applies whether their pay is a weekly salary, day rate, or a piece or task rate. There are some exemptions for outside sales people, agricultural workers, and actual executives and managers.

What are my rights to overtime as a salaried worker?

Even if you are paid a salary, you should still be paid overtime for working over 40 hours in a week. For hours you work over 40 hours a week, you should get paid an hourly rate plus half time—one-half of your hourly wage, calculated from your hourly wage or the equivalent of an hourly wage based on your salary. There are exemptions if you are a manager or an executive employee.

Sometimes employers will try other ways to avoid overtime payments, such as paying workers on the books for 40 hours, and then paying workers off the books at less than the overtime rate. At times, piece or task rates may be used to hide minimum wage violations. However, if you are paid by salary or piece rate, you still have the right to overtime and minimum wage protections.

What are the rights of resident domestic and home health care workers?

The New Jersey Department of Labor (NJDOL) has a special wage regulation for resident overnight workers who are living in the home of the employer. This regulation states that if it is unfeasible (too difficult) to document the hours of work of the employee, the employer can simply pay eight hours  per day.

The NJ DOL at times broadly interprets this regulation to mean that in-home workers can be paid simply for eight hours of work, regardless of the number of hours that they are actually working. This situation should be very limited, however. Technology has made it very easy to keep an accurate account of hours worked, and only with rare exception should a worker get paid according to the eight-hour limitation.

Wage law focuses on being on duty at the place of work—not every moment being worked. In fact, if employees are involved in work that is ongoing with periods of down time, workers should be paid for down time. If you are not really free to use the down time for your own benefit, you should be considered as “engaged to wait,” and the waiting time should be counted as hours worked. Under the federal Fair Labor Standards Act, breaks must be 30 minutes or more to be considered a real release from work duties.

It is the employer’s responsibility to keep accurate records of time. If they are not  able to provide a record of your time worked, then your testimony should be given more weight. It will be the employer’s job to prove that your testimony is not accurate.

How do I know if an employer has misclassified me as an independent contractor instead of an employee?

Another way to avoid minimum wage and overtime protections for low-wage workers is misclassification of workers as independent contractors. Employers may try to classify workers as independent contractors in order to avoid costs connected with wages, Social Security taxes, unemployment taxes, and workers compensation coverage. There is a test, referred to as the “ABC” test, which is used to determine if they are allowed to classify someone as an “independent contractor.”

The “ABC” test assumes an individual is an employee unless the employer can document the following:

  1. The individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and
  2. Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
  3. Such individual is customarily engaged in an independently established trade, occupation, profession, or business.

Basically, this test is meant to determine whether the employer is supervising the work of the employee, whether the work is performed onsite, and whether the worker has an independent business. If the employer cannot meet all three of these requirements, you should be classified as an employee, not an independent contractor—even if an employer asks you to sign an agreement stating that you are an independent contractor. These types of independent contractor agreements are not a deciding factor in determining how the worker is to be classified.

When a worker is inappropriately classified as an independent contractor, that worker is most likely subject to violation of overtime laws if there are more than 40 hours per week, under the overtime provisions of New Jersey Wage and Hour law and the federal Fair Labor Standards Act.

What can I do?

Workers have several options if they believe they have not been paid fairly. Even if you have not kept wage records to show hours worked, and if the employer has failed to keep proper records, you can still go to court to give testimony that you were unpaid for hours worked. If you were unpaid overtime or minimum wages, you can go back two years, and in some instances three years, to get the wages. If the employer failed to pay you a promised wage, you can go back six years.

The federal Fair Labor Standards Act (FLSA) and the state protections in the New Jersey Wage and Hour Law and the Wage Payment Act both provide wage protections. Federal protections apply to employers engaged in interstate commerce, so if your employer’s business crosses state lines, you could make a claim through the federal court system and be covered under FLSA. There are strong protections under FLSA, and more and more lawyers are willing to take these kinds of cases. Under FLSA, the statute of limitations for minimum and overtime claims is   two years, or three-years if there was a willful violation.

Under New Jersey law, minimum wage and overtime violations have a two-year statute of limitations. Nonpayment of established wages has a six-year statute of limitations.

For small and moderate claims up to $30,000, you can represent yourself in a New Jersey Department of Labor claim. You can obtain records from the New Jersey Department of Labor pursuant to the New Jersey Open Public Records Act. You will be able to appeal to the Superior Court if you lose this case and get a new hearing there.

If you need help with a wage claim, you can request help through LSNJLAWSM, Legal Services of New Jersey’s statewide legal hotline, by applying online or calling 1-888-LSNJ-LAW (1-888-576-5529).​

9/22/2015