PUBLICATIONS

What To Expect For NJ Employers In 2013

Law360
Date   Mar 5, 2013

Published by Law360, New York (March 05, 2013) 

New Jersey's legislature was busy in the later part of 2012, lining up new legislation for 2013 that will impact New Jersey employers. Bills pending before the legislature include continued emphasis on wage and hour issues, including independent contractor misclassification and stiffer penalties for wage and hour violations including loss of business licenses.

In November, voters will decide an increase in the minimum wage rate. Employers should be aware of these and other issues in 2013.

Minimum Wage Increase

Following Gov. Chris Christie's conditional veto of bills proposing an increase in the state's minimum wage, state legislators have announced that they will take the proposal directly to voters in November (SCR-1/ACR-168).

State legislators had proposed automatically increasing the state's minimum wage rate to $8.50 and tying it to the Consumer Price Index every year thereafter (A-2162/S-3). Christie conditionally vetoed the proposal and countered with a gradual increase of $1.00 over three years.

If passed by voters in November, New Jersey's $8.25 minimum wage rate would match those of Connecticut, Washington D.C., and Illinois. Oregon at $8.95 per hour, Vermont at $8.60 and Washington at $9.19 would have higher minimum wage rates.

"Ban the Box" — Criminal History

Under this proposed legislation (S-2586/A-3837), employers would be prohibited from asking job applicants to disclose criminal histories until a conditional offer of employment had been made. The bills mandate that employers provide denied applicants forms indicating their consideration of criminal history in decision-making and establish a mechanism whereby disappointed applicants may submit mitigating evidence to be considered by the employer.

Employers would be limited in what information they could consider in making the employment decision to:

•Indictable offense convictions, so long as no more than 10 years have passed since the applicant was sentenced or released from custody
 
•Disorderly persons convictions and municipal ordinance violations, so long as no more than five years have passed since the applicant was sentenced or released from custody
 
•Any pending criminal charges
 
Additionally, employers would be free to consider convictions involving serious violent crimes, including murder, attempted murder, arson, sex offenses requiring registry and acts of terrorism, regardless of the length of time that has passed since the conviction.

If passed, New Jersey would join several other states, including California, Connecticut, Hawaii, Massachusetts, Minnesota and New Mexico, and numerous cities and municipalities, which have enacted the ban. New Jersey cities Newark and Atlantic City already have similar prohibitions in place.

Averting 10-percent Unemployment Surcharge

Two bills would suspend an automatic 10-percent unemployment surcharge scheduled to take effect in July 2013 (S-2404/A-3675). This year, because of the insolvency of the unemployment insurance fund, employers already pay between $370 and $2,200 per employee. These bills seek to avert an additional 10-percent surcharge per employee. The Senate passed the bill, and it is pending before the assembly.

War on Independent Contractor Misclassification

The independent contractor arrangement is under pressure from many different sources, including the New Jersey Department of Labor and Workforce Development and the legislature.

The legislature has introduced multiple bills which are directed at misclassification of independent contractors:

A-1578/S-1450

Directed at the trucking industry, this proposed law would impose second-degree criminal penalties (akin to aggravated assault, sexual assault, manslaughter and vehicular manslaughter) on trucking industry employers who misclassify workers as independent contractors. The proposed law creates a presumption that owner-operators are employees and not independent contractors.

A-3310

This bill authorizes the NJDOL to investigate, mediate and prosecute claims by certain independent contractors (sole proprietors) that they were not properly paid in their transactions with businesses and nonprofits. It imposes additional record-keeping requirements on businesses and nonprofits that contract with certain independent contractors and establishes civil and criminal penalties for violations of the law.

A-3581

This bill is a minefield for employers. It creates new penalties for wage and hour violations, including loss of business licenses, and strengthens enforcement procedures and criminal sanctions against employers. It also creates a rebuttable presumption of employment relationship for workers earning less than the "median wage," a rate to be set by the NJDOL.

Additionally, the bill mandates the NJDOL audits and investigations following conviction and creates a private right of action in the municipal courts.

AR-79/SR-64

This bill requests that the governor have New Jersey participate in joint state and federal initiative against misclassification of employees as independent contractors. Passed by the assembly (46-29-0), this request has been filed with the secretary of state.

Pay Discrimination and Retaliation

After passing a new notice posting requirement in 2012, Christie returned two bills regarding discriminatory pay practices to the legislature with significant amendments.

A-2650 proposed elimination of the statute of limitations defense applicable to compensation discrimination claims under New Jersey's anti-discrimination statute. Christie recommended that the bill be amended to mirror the holding of the New Jersey Supreme Court and the federal Lilly Ledbetter Fair Pay Act of 2009 to explicitly limit the amount of back pay an employee can recover. Christie's changes limit the damages recoverable from discriminatory pay practices to only the previous two years, instead of throughout the life of the allegedly discriminatory practice.

A-2648 prohibited retaliation against employees who disclose or request pay information, including information regarding their compensation, benefits or occupational category, based on a reasonable belief that there is a discriminatory pay practice occurring in the workplace. Christie recommended that the provision be included in the New Jersey Law Against Discrimination rather than the New Jersey whistleblower statute, the Conscientious Employee Protection Act.

Leave for Victims of Domestic Violence

Creating a leave entitlement for victims of domestic violence and certain family members, these bills (A-2919/S-2177) would provide 20 days of protected leave. Amendments have clarified that the leave would run concurrently to any other leave entitlements, such as the federal Family and Medical Leave Act, and employers would be permitted to require employees use available accrued leave.

Employees would be able to take leave to seek or receive medical treatment; obtain services from a victim services organization; obtain psychological or other counseling; participate in safety planning, moving or take other actions to increase safety; seek legal assistance; or attend participating or prepare for criminal or civil court proceedings.

Social Media

Two bills (A-2878/S-1915) attempt to protect online privacy rights of employees and applicants in response to reports of employers demanding social media passwords. The bills have passed in both houses.

Workplace Bullying

Presented as the "Healthy Workplace Bill", these bills (A-3249/S-333) prohibit bullying behavior in the workplace. The proposed law would create liability for employers who permit abusive work environments or for employers who retaliate against employees who complain about workplace bullying.

What Does this Mean for Employers?

New Jersey's legislature has been busy drafting bills that will impact employers. These bills have serious implications for businesses and employees. During a time when businesses are still struggling, these bills could have profound and lasting effects on the state economy.

--By Salvador P. Simao and Joanna S. Rich, FordHarrison LLP