New Jersey Employment Law Case Examines the Effect of Amendments Concerning Time to File a Lawsuit for Wage and Hour Violations

The New Jersey Wage and Hour Law and Wage Payment Law

Like the Federal Fair Labor Standards Act, New Jersey’s Wage and Hour Law requires that employers pay non-exempt employees minimum wage for all hours that they work, and overtime (time and a half) when employees work more than forty hours per week.  New Jersey’s Wage Payment Law requires that employers pay employees pay all wages that they are due, and sets forth the timing and procedures for payments and permitted deductions.  This is a much-litigated area of New Jersey employment law.

Suits under the New Jersey Wage and Hour Law and Wage Payment Law have long been required to be brought within two years of the violations or they would be time barred.  However, in 2019 the New Jersey Legislature amended both laws to extend the time for filing a civil lawsuit for violation of the laws from two to six years.  The amendments were silent about whether they would apply retroactively or only going forward.  Generally, unless the Legislature provides for retroactive application of new statutes of limitations they apply only prospectively – in other words they normally apply only going forward to acts which occurred after the amendment, not looking backward to what happened before.  These amendments were to take effect immediately upon enactment, which occurred on August 6, 2019.

In addition to revising the limitation period, the amendments also provided that employees could recover their unpaid wages plus twice their unpaid wages as liquidated damages – in other words, they could recover three times what they should have been paid – plus their attorneys fees.  The amendments gave employers a defense to a first violation if they could prove that the violations was “an inadvertent error made in good faith,” that they had reasonable grounds for the error, and that they paid the amount owed within thirty days of notice of the violation.  The limitation period applied to these provisions as well.

Because of case law that provided that the general rule is that amendments apply prospectively unless the Legislature specifies otherwise, and the silence in the amendments about their prospective or retroactive application, it was generally assumed that the law would apply only prospectively on a going forward basis – ie., for acts which occurred prior to August 6, 2019, the lookback period would be only 2 years and the enhanced penalties would not apply.

 

The Appellate Division’s Opinion in the Maia Case

The look back period was recently examined by the Appellate Division in the case of Maia vs. IEW Construction Group.

In 2021, two years after the amendments, two employees sued IEW Construction Group in the Superior Court of New Jersey claiming violations of the New Jersey Wage and Hour Law and Wage Payment Law resulting from failure to pay them for “pre-shift and post-shift work.”  They claimed that they were entitled to sue for damages going back six years, ie., for alleged violations which occurred four years before the amendments were passed, requiring retroactive application of the amendments.  IEW’s attorneys filed a motion asking the Court to dismiss all claims for acts which occurred more than two years prior to the filing of the lawsuit and more than two years before August 6, 2019, arguing that claims older than two years were allowed only after the enactment of the amendments.  The Superior Court judge agreed and dismissed all claims occurring more than two years before the lawsuit was filed if they occurred prior to August 6, 2019, and allowed the employees’ remaining claims to proceed.  The employees appealed to the Appellate Division of the Superior Court.

The Appellate Division rejected IEW’s arguments that the six year period in which to file suit should be applied only going forward after August 6, 2019.  It said that any case filed on August 6, 2019 or thereafter could seek redress for violations dating back six years from the filing of the lawsuit, even if that six year period, such as in the Maia case, extended back before August 6, 2019.

 

The Bottom Line

The current state of the law is that any lawsuit for a violation of the New Jersey Wage and Hour Law or  Wage Payment Law can seek recovery for alleged violations going back six years from the date the complaint was filed with the court, regardless of whether that six years includes alleged violations which occurred prior to August 6, 2019.

However, that holding is tenuous.  The New Jersey Supreme Court has not spoken on the issue.  And while the Supreme Court accepts only a very limited number of appeals each year, it generally agrees to hear contentious employment law appeals, particularly about application of the State’s wage and hour laws which effect the majority of New Jersey’s workers.  So stand by.  The last word on this issue has likely not been written.

 

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