New Jersey Lawyers Blog

Published on: January 22, 2014

The Relationship Between A Bonus and Overtime Under The Fair Labor Standards Act

The Fair Labor Standards Act of 1938 (“FLSA”) is a federal statute that was introduced to regulate certain employment practices. For example, the FLSA establishes a national minimum wage, guarantees pay at a rate of one and one-half times the employee’s regular rate of pay for certain jobs, and prohibits most employment of minors in oppressive child labor positions.

The FLSA also imposes various requirements on employers. It is important for employers to be aware of the requirements imposed on them by the FLSA. For example, many employers will pay their employees bonuses to reward them for their time and commitment during the year. The problem for employers is that a year-end non-discretionary bonus may be included in employees’ regular rate of pay when calculating overtime.

Generally, the FLSA requires that employers calculate employees’ regular rate of pay by including all compensation paid to employees during the workweek. Employers must then calculate overtime based on employees’ regular rate of pay. Sometimes bonuses are required to be included when calculating employees’ regular rate of pay, however, is an exception and not used for calculating overtime. If bonuses are included in employees’ regular rate of pay then employers must pay more overtime, and then more payroll tax as well.

There are exceptions that permit the payment of discretionary bonus which is not required to be included in employees’ regular rate of pay, however, is an exception and not used for calculating overtime. For a bonus to be excluded from the calculation of employees’ regular rate of pay it must be discretionary. For a bonus to be discretionary the payment must be solely within employers’ discretion. This means that the payment cannot be mandated by a contract, agreement, or based on an implied promise. Employers must have complete discretion to decide whether to pay the bonus, and how much to pay if they chose to do so.
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Published on: January 20, 2014

New Jersey Will Contests

by Jennifer C. Meusel

What happens if you believe that a loved one’s last will and testament is not valid? Under New Jersey probate law, if there is a last will and testament, it must be probated (filed) with the surrogate in the county where the decedent resided. The will’s terms control the distribution of the decedent’s assets. However, there are a number of reasons why a will can be challenged. If the challenge is successful, then the will is voided and the probate assets will be distributed either by a previously executed will or the laws of intestacy.

The simplest way to challenge a will is before it is probated. In New Jersey, you cannot probate a will until at least ten days following the date of death. Any time before the will is probated a caveat can be filed with the court and this will prevent probate of the will. Then any disputes regarding the will’s validity will be resolved before the court permits it to be probated.

The will’s validity can also be challenged after it has been probated. To challenge a will under New Jersey probate law you must be able to prove one of the statutory reasons which include undue influence, lack of capacity, fraud, forgery, revocation and mistake. There is a short time period to challenge a will, if you are seeking to challenge a will and you reside in New Jersey the statute of limitation is four months and if you are an out of state resident the statute of limitation is six months. The most often encountered bases of a will challenge are undue influence and lack of capacity.

To challenge a will based upon undue influence, you must show “coercion exerted [which] may be mental, moral or physical, or all three, but it must be such as to pre-empt the testator from following the dictates of his own mind and will and accepting instead the domination and influence of another.” Essentially the question here is whether the person who signed the will did so of his own free will without influence or pressure from someone who benefitted from the terms of the will. The person challenging the will must prove that a person in a “confidential relationship” with the testator unduly influenced the terms of the will, and that there were “suspicious circumstances” surrounding the execution of the will. To determine whether there was undue influence the courts will look at many factors, including: if the terms of this will are a significant change to a prior existing will; the age and health of the testator at the time the will was signed; if the testator lived with or under the supervision of the person benefitting from the will; if the person in the confidential relationship with the testator is benefitting from the terms of the will; and if the person benefitting from the will hired the lawyer to prepare the will.
Will challenges are also frequently based upon the testator’s lack of capacity to make the will. To successfully challenge a will for lack of capacity under New Jersey estate law, it must be shown that at the time the will was executed, the testator did understand: 1) the nature and value of the property he owned; 2) the identity of the “natural objects of his bounty” (the family members would receive his property upon his death if he did not have a will); and 3) the effect of the terms of his will.
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Published on: January 17, 2014

New Jersey Property Tax Appeals

by Jennifer C. Meusel

Now is the time to start thinking about appealing your property taxes.

The amount of property taxes a homeowner pays under New Jersey property tax law is determined by the municipal assessment. The lower the assessment, the lower the property taxes. While you cannot actually appeal the taxes you owe, New Jersey law allows you to appeal the assessment. The tax assessment of your property should reflect the fair market value of your home, which is adjusted by the municipality’s equalization ratio. The municipality is allowed a margin of error of fifteen percent. So, if your assessment is more than 15% over the equalized fair market value of your property, you should appeal your property taxes.

The first step is determining if your equalized assessment is more than fifteen percent above fair market value. First, you need a good approximation of the fair market value of your property – perhaps you know the sales prices of similar homes in your neighborhood, or a local realtor may be able to give you a rough estimate of the fair market value of your house, then you have a place to start. Next, you will receive a property assessment notice from the municipality which includes the assessed value of your property. Then, you need to check the equalization ratio for your municipality. Your assessment must then be equalized by applying the correct equalization ratio. Once you have applied the equalization ratio to the assessed value, you will know what the municipality believes is the fair market value of your property. If that number is more than fifteen percent above what you believe the fair market value to be, you should proceed to file a tax appeal petition.

At this point, you will need evidence to back up your assertion of your property’s fair market value. The best evidence is an appraisal by a certified appraiser who, if necessary, could testify at the tax appeal hearing. You can attempt to appeal your property taxes supported only by evidence of comparable recent sales, but the municipality can much more easily dismiss that evidence based on distinctions between your property and the each recent sale, or based upon facts surrounding the sale. For instance, it may have been a distressed sale where the seller was forced to accept a lower than market value price.
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Published on: December 13, 2013

Medicaid Asset Protection: Converting Coutable Spousal Resources into a Protected Income Stream Using Annuities

by Jennifer C. Meusel

Our clients often ask how they can protect their assets from Medicaid in the event a spouse must enter an assisted living facility in the future. While the Medicare Catastrophic Coverage Coverage Act of 1988 allows a community spouse (the spouse who does not require the coverage) to preserve certain assets,, the community spouse may only retain up to $113,640 (this is known as the “Community Spouse Resource Allowance”). However, often Community Spouse Resource Allowances will be insufficient for the community spouses to maintain their current standard of living.

One method which can be used to increase the funds available to the community spouse is an annuity which converts funds into income for the community spouse. As the community spouse’s income is not considered when determining Medicaid eligibility, the funds which would have been countable are removed from the eligibility determination. Those funds no longer need to be spent down prior to applying for Medicaid.

For instance, suppose a New Jersey couple has $500,000 in assets. While a community spouse may be permitted to retain $113,640, the balance of the assets would need to be “spent down” before the spouse would be permitted to apply for Medicaid. However, if the assets are transferred to the community spouse and then the community spouse uses the funds to purchase a qualifying annuity, then the assets are no longer “countable” for Medicaid purposes. This is a permissible way to protect assets for two reasons: First, transfers to spouses are permitted under the Medicaid rules and are not subject to the 5 year “look back” rule and, second, the money used by the community spouse to purchase the annuity was spent to purchase something of equal value and are also not subject to the five year look back rules. As the community spouse’s income is not considered for purposes of Medicaid eligibility, the assets have effectively been converted into an income stream and protected for the use of the community spouse. This, of course, is subject to the community spouse’s Minimum Monthly Maintenance Needs Allowance restrictions. The income cannot exceed the allowed amount.
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Published on: December 5, 2013

Internet Gambling in New Jersey

by Pauline M.K. Young

Gambling is one of the many activities that are regulated primarily by state laws (as opposed to federal laws). On February 26, 2013, New Jersey Governor Christie signed into law legislation allowing internet gambling, making New Jersey only the third state to allow internet gambling (after Nevada and Delaware). While there is a federal law called the Unlawful Internet Gambling Enforcement Act, which does, to a certain extent, restrict online gambling, that law allows individual states to permit and regulate internet gambling if the state so desires.

Atlantic City, New Jersey has always been a hot spot for gamblers from all over the world since the late 1970s and early 1980s. However, over the past several years, Atlantic City has been struggling financially with the increase of gambling in neighboring states. Therefore, New Jersey decided to combat this struggle by allowing online gambling. Six already established brick and mortar casinos were able to obtain internet gaming permits: Borgata, Trump Plaza, Trump Taj Mahal, Bally’s, Caesars, and the Golden Nugget. The first five of these permit holders were given approval to participate in a five day test run or “soft” start, of the internet gaming beginning at 6 p.m. on Thursday, November 21, 2013 (the Golden Nugget had not met all requirements in time to receive approval), with 13 websites approved for the online gambling.
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Published on: November 26, 2013

Residency Requirements for New Jersey State Employees

by Pauline M.K. Young

The New Jersey First Act makes it mandatory for many public officers and employees to live in New Jersey. The law, which went into effect September 1, 2011, requires all New Jersey state and local government employees to reside in New Jersey unless otherwise exempted. This includes, for example, employees of public agencies, commissions, public institutions of higher education, and school boards.

Employees who were already employed as of September 1, 2011 are grandfathered in, meaning they are not required to meet the residency requirement and are not required to move to New Jersey if they were not required to under prior law. However, those who begin working after September 1, 2011 must reside in New Jersey. If they do not, they have one year following the start of their employment to relocate to New Jersey. If the new employee does not move within a one year period, she may be removed from her position. The September 1, 2011 cutoff date is determined based upon when the employee actually started working, not when she received an offer of employment.

If there is a break in employment of more than seven days, an employee previously grandfathered in, may lose that status and become subject to the residency requirement. A “break in public service,” while not set forth in the language of the law, is defined by the New Jersey Civil Service Commission as “an actual separation from employment for more than seven calendar days due to such causes as resignation, retirement, layoff, or disciplinary removal.” Generally, a resignation for the purposes of a new public appointment in the same governmental jurisdiction is not considered a break in public service.
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Published on: November 18, 2013

New Jersey’s Strides Towards Equal Pay for Women

by Pauline M.K. Young

The Unites States Census Bureau has consistently found that women are paid less than men every year. Indeed, the National Women’s Law Center found that in New Jersey in 2012, a woman made approximately 79 cents for every dollar a man made. These discrepancies do not just account for females in different careers from males, but that this pay differential is also present for females in the same or similar fields as their male counterparts.

While New Jersey does not have as wide a gap between men and women as some other states, the pay gap is still clear and ongoing. While discrimination against women has constituted a violation of New Jersey’s Law Against Discrimination for decades, it is often difficult to prove. For instance, an employer can simply say that its female employee was being paid less than a similarly situated male employee because the male employee had better qualifications or performed better. It would be rare for an employer to have two employees, one male and one female, who had the same education, the same grades, attended the same schools, had the same level of experience and measures of success, and performed or produced exactly the same. Therefore, it is difficult to prove that any pay discrepancy is due to gender and not some other valid reason.

However, even more basic than that, the employee would have to be able to find out in the first place that she was in fact being paid less than what she would be paid if she were male. Indeed, many employers have a strict policy of forbidding employees from discussing their salaries, wages, or other benefits. While employers have a right to make the determination about what they will pay their employees, employers cannot take something such as gender into account when making that determination, just as employers cannot alter their payments as a result of race or religious beliefs.
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Published on: November 15, 2013

Alternatives to Mortgage Foreclosure in New Jersey

by Jennifer C. Meusel

If you have been served with a foreclosure complaint for failing to make payments on your mortgage, and you would like to keep your home, there are several options available to you: loan modifications, NJ HomeKeeper program, foreclosure mediation, and Chapter 13 bankruptcy. All these programs are available to New Jersey Homeowners, and our attorneys can help you pursue each.

Loan Modification

The Home Affordable Modification Program is a federal program which can lower your monthly mortgage payments and/or wrap arrearages into your loan enabling you to retain ownership of your home. It typically extends the length of your mortgage to forty year mortgage and lowers your interest rate. In order to be considered for a modification, you must submit an application to your lender accompanied by all required back up documentation. This includes a hardship affidavit, tax returns, pay stubs, bank statements, statement of expense, and a recent utility bill.

This can be a difficult process; the lender often requests the same documentation multiple times, or requests minor changes to the documents which have been submitted. Additionally, if time passes after the documents have been submitted without the lender’s review, the lender may require updated current documents be resubmitted. This can be frustrating for the homeowner who is concerned about losing their home. However, persistence can pay off.

NJ Homekeeper

The New Jersey HomeKeeper Program is a New Jersey program which provides financial assistance to homeowners who are unemployed or underemployed and are therefore at risk of losing their homes. To be eligible, you must demonstrate that you were making your mortgage payments until the time you became unemployed (or underemployed) and that the unemployment occurred not more than 36 months before the date of the Homekeeper application. If eligible, NJ Homekeepers can provide up to $48,000 over a period of 24 months which can be used to help make current payments or pay arrearages. The funds provided by NJ Homekeepers are a loan which must be paid back if the homeowner sells, refinances, transfers ownership or no longer occupies the property within 10 years.
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Published on: November 13, 2013

Pretrial Intervention Program

by Boris Peyner

Under New Jersey criminal law, the Pretrial Intervention Program, commonly known as “PTI” provides first-time offenders with the opportunity for an alternative to the ordinary criminal justice prosecution. PTI provides rehabilitative services to deter future criminal behavior. The program is based on a rehabilitative model that recognizes that there may be a casual connection between a charged offense and the rehabilitative needs of a person. The ultimate goal of PTI is to prevent future criminal behavior.

The best benefit of successfully completing PTI is that there is no record of conviction and an individual can avoid the stigma of a criminal record. Additionally, many of the costs associated with the formal court process can be eliminated. However, acceptance into and completion of the PTI program does not remove an arrest from individual’s record. Instead, successful completion of the PTI program will result in the dismissal of the original offense. Therefore an individual who successfully completes the PTI program should still seek to an expungement to remove any record of the original arrest. Failure to successfully complete the program will result in the case returning to the ordinary course of prosecution.

To be eligible for the PTI program, a defendant must be charged with an indictable offense. The program is designed for individuals who have no previous convictions and have never been granted permission into any other diversionary program or discharge. An individual seeking entry into the PTI program must be an adult resident of New Jersey. Individuals charged with criminal or penal offenses in New Jersey criminal or municipal courts can apply.

Published on: November 12, 2013

New Jersey’s Social Media Law

by Pauline M.K. Young

It has become common to hear news stories about employees who posted something on their personal Facebook, or other social media sites, and then got fired as a result of that post. Indeed, employers have, more and more, started to use social media sites as a way of monitoring their employees, even to the point of requiring passwords or access to otherwise “private” websites or submissions.

However, beginning on December 1, 2013, New Jersey will follow the growing trend in other states in enacting legislation which will bar New Jersey employers from asking employees or potential employees for access to their personal social media accounts. This comports with the recent New Jersey law enacted in 2012 which bans colleges from requiring applicants to provide social media account passwords.

This new law specifically prohibits employers from requesting or requiring employees’ usernames, passwords, or other access to personal accounts on websites such as Twitter and Facebook. Further, employees cannot even waive this right. Any waiver of this right is deemed void.
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