Unscrupulous employers steal more money from workers every year than the amount of money lost due to shoplifting. Wage theft is any instance where an employer fails to pay their worker wages owed for work performed. Every year, wage theft results in billions of dollars of losses to the national economy and wreaks havoc in the lives of millions of workers. In order to halt widespread losses to the economy and to align the state of New Jersey with neighboring states, the New Jersey legislature recently strengthened the state's wage-and-hour and wage payment laws by passing  bill S1790/A-2903 (the "Act").

The Act created one of the most expansive wage theft laws in the United States by expressly prohibiting retaliation against workers who speak up regarding an alleged wage theft violation, increasing financial penalties for violations, extending the statute of limitations to six years, and broadening the joint employer analysis to include franchises and labor contractors. As a result, New Jersey attorneys have new tools to use in pursuing justice on behalf of workers claiming unpaid wages. For nearly a decade, worker centers like New Labor, the Laundry Workers Center, and Make the Road New Jersey championed efforts to update New Jersey's law to respond to an increasing epidemic of wage theft. We urge New Jersey lawyers to utilize creatively the Act's new provisions, particularly in pursuing collective justice for groups of workers facing similar issues with the same employer. At Make the Road New Jersey's organizing hubs in Passaic, Elizabeth, and Perth Amboy, workers regularly report wage theft because it affects their daily ability to make ends meet. Attorneys from the private bar, in government, and nonprofits, are needed to engage in enforcement actions to end these too-widespread practices as the new law intends.

By the time you read this, employers across the state should have provided workers with a statement setting forth workers' rights to not have their wages stolen and explaining how to take action pursuant to the state's new anti-wage-theft law. However, those statements alone are likely not sufficient to fully educate our workforce on how to reclaim stolen wages. Wage theft in New Jersey is widespread and takes many forms. For example, wage theft may include:

• Failure to pay the minimum wage (which was recently increased to $10/hour and will increase by $1 annually, effective January 1st, up to $15/hour in 2024);
• Failure to pay premium pay for overtime;
• Not paying for hours worked, for example before or after the "regular" day, or for work performed during work-free meal times;
• Undercounting hours worked;
• Taking improper deductions and kick-backs from earned wages; or
• Misclassification—the practice of illegally or improperly classifying workers as independent contractors, rather than employees, or as otherwise exempt from wage, hour and payment laws.

It's long been against the law to withhold earned wages, but there were limited means for workers to legally demand and actually receive their earned but improperly withheld wages. Under the new Act, workers have improved chances of obtaining remedies, and we want you to utilize the new law. Previously, New Jersey law provided no liquidated damages and a de minimis penalty for employers who failed to pay workers minimum and overtime wages. The statute of limitations was only two years, meaning that by the time many workers were able to pursue relief, their relief was limited.

In enacting the recent wage theft law, the New Jersey legislature made the following changes, each of which provides new practice tips in pursuing wage theft claims:

1. Lengthened Statute of Limitations to Six Years

Because the provisions of the Act do not create new substantive rights, but only changed the remedy for conduct already deemed wrongful, attorneys can now argue that workers are owed wages going back six years from the current date. Pennsylvania Greyhound Lines v. Rosenthal, 14 N.J. 372, 381, 382 (1954). This change is a significant increase from the previous two-year statute of limitations period. See revised R.S.34:11-58(a). In addition, because of this lengthened statute of limitations, many low-income workers who change jobs every two to three years will now have the ability to freely pursue claims against their previous employers without fear of retaliation. Fear of retaliation is one of the greatest inhibitors to pursuing a wage theft claim and the broadened statute of limitations means there are now far more potential plaintiffs ready to pursue claims.

2. Anti-Retaliation Provision with Teeth

Attorneys pursuing claims should also make note to closely track any form of retaliation by an employer against an employee seeking to obtain unpaid wages. Any adverse action taken within 90 days of making a complaint for wage theft is presumed to be illegally retaliatory and can only be "rebutted by clear and convincing evidence that the action was taken for other, permissible, reasons." See revised Section 10 of P.L.1965, c.173 (C.34:11-4.10a). Moreover, there are meaningful penalties in the law for such behavior, including double damages and attorney fees. Therefore, attorneys should be mindful to initiate the process as soon as possible and to amend complaints after they are initiated. We note that there is no requirement that an employee initiate a wage and hour claim prior to claiming retaliation, as the law contemplates that a worker may demand earned wages to be paid without starting the administrative or legal process.

3. 200% Liquidated Damages

Now, an employer's failure to pay proper wages can result in more than the immediate economic loss of monies withheld. Legislators intended for workers to be compensated for the array of problems created when a worker does not receive monies earned, and is not promptly paid. As a worker and immigrant rights community-based organization, we hear far too often how not getting paid on time results in difficulties with paying rent, affording a co-pay for a doctor's visit, or purchasing groceries or school supplies. Under the revised statute, damages can amount to two times the immediate economic loss to compensate for such hard-to-quantify injuries, and to penalize wrongdoing employers. Additionally, liquidated damages also penalize this wrongful behavior, providing both specific and general deterrence.

4. Utilizing New Joint Employer Standard to Pursue Claims Against Staffing Agencies or Labor Suppliers

Under the strengthened wage theft law, an organization or individual that "supplies, either with or without a contract, directly or indirectly … workers to perform labor or services" to the employer is jointly liable for wage theft. See Act Section 10(c). Therefore, workers at temporary staffing agencies or other labor suppliers can hold the contracting entities liable for not paying monies due for work completed.

5. Further Pursuing Successor Employers

The revamped law allows for further pursuit of claims against successor employers. Too often, employers who engage in wage theft or other illegal practices shut down and open up with the same operations but under a different corporate entity. In particular, New Jersey attorneys can now pursue claims on behalf of temp workers who fall victim to the practices of a temporary employment agency that folds and opens up with the same operations.

6. Penalizing Improper Deductions

The new law strengthens existing statutes against kickbacks and other unauthorized deductions from a worker's pay by including liquidated damages and attorney fees as remedies. For example, temporary agencies are not allowed to deduct the fees for travel to and from a worksite without obtaining written consent from temporary agency workers; however, workers report that their paychecks are often deducted for these fees, which then reduce their take-home pay below the minimum wage. See N.J.A.C. 13:45B‐12.3.

7. Criminalizing Wage Theft

The Act also created a new third-degree crime for persons who knowingly commit wage theft if they have been convicted of a violation of wage and hour laws on two or more occasions. It should be noted that although it's a third-degree crime, the presumption of non-imprisonment does not apply. See Act Section 13b. Moreover, the criminal penalties are in addition to the standard penalties for a disorderly person offense, and mandatory liquidated damages of 200% plus a fine.

Enforcing New Jersey's revamped wage theft laws allows workers to obtain justice, law-abiding employers to play on a level playing field, and to enhance  working-class communities' dignity,  respect, and economic viability.

As an alternative to litigation, workers  may file a complaint with the New Jersey Wage and Hour Division. Under the new law, workers may also file a criminal complaint with the prosecutor in the respective municipality where the employer's business is located. The contact information for the municipal courts may be found at njcourts.gov/public/assets/directories/munctadr.pdf.

At Make the Road New Jersey, our members regularly educate the community about their legal rights. They know that power and dignity for workers doesn't come through lawsuits alone, so they encourage and train their co-workers and neighbors to pursue collective action, whether through group wage-and-hour claims, class-action litigation, and most importantly, organizing in the workplace.

Adil Syed Ahmed is the director of Worker Organizing and Policy at Make the Road New Jersey and an attorney admitted in New Jersey and Pennsylvania. David Tykulsker is an attorney in Montclair, representing employees and labor organizations.