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New Jersey’s Legislature Continues to Alter Employment Law Landscape

While New Jersey has long been considered progressive in preserving and protecting the employment rights of its citizens (see last year’s Pay Equity and Paid Sick Leave Laws), current activity in the Legislature and Governor’s office relating to laws impacting the workplace is at an all-time high. The following is a summary of several new and proposed laws that potentially impact every worker and employer throughout the state.

$15.00 Per Hour Minimum Wage

On February 4, 2019, Governor Phil Murphy signed legislation to increase New Jersey’s minimum wage to $15.00 per hour for most employees by 2024. Currently, New Jersey’s minimum wage is $8.85 per hour. Under the new law, the minimum wage will increase to $10.00 per hour on July 1, 2019, $11.00 on January 1, 2020, and it will increase $1.00 on January 1 of each proceeding year until $15.00 is reached on January 1, 2024.

The minimum wage for small employers with less than six employees and for seasonal workers will increase at a different rate and will reach $15.00 an hour in 2026. The minimum wage for farm workers will increase to $12.50 by 2024.

New Jersey joins California, Massachusetts, New York City, and Washington, D.C., all of which have passed legislation increasing the minimum wage to $15.00 per hour.

Increase to New Jersey Family Leave Benefits

Legislation awaits Governor Murphy’s signature which would significantly increase the benefits currently available under New Jersey’s Family Leave Act (“FLA”) and Paid Family Leave Insurance (“FLI”).

Under Senate Bill No. 2528, total FLI benefits would increase from six weeks to twelve weeks. Weekly benefits payable under FLI would increase from the higher of two-thirds of an employee’s weekly wage or $633 to the higher of 85 percent of the employee’s weekly wage or $859. All of the costs for FLI will continue to be borne exclusively by employees through payroll deductions. The one-week waiting period currently required before FLI benefits are paid would also be eliminated. Intermittent FLI days would be increased to 56 days.

Somewhat lost in all the press given to the potential increase in FLI benefits is the bill’s impact on FLA. This law, like the federal Family and Medical Leave Act, provides for 12 weeks of protected leave for the birth or adoption of a child or to attend to a sick family member. Currently, the FLA applies to employers with 50 or more employees. The bill reduces this threshold number to 30 employees. In addition, coverage for “family members” under the FLA, FLI, and New Jersey’s Safe Act would be expanded to include siblings, grandparents, grandchildren, in-laws, and others related by blood or in a relationship equivalent to a family relationship.

Law Banning Non-Disclosure Agreements of Harassment and Discrimination Claims

Another bill on Governor Murphy’s desk (Senate Bill No. 121) would amend New Jersey’s Law Against Discrimination to prohibit any employment contract or other agreement that has the purpose or effect of concealing details relating to a claim of discrimination, retaliation, or harassment. The proposed law would require any settlement agreement pertaining to a discrimination or harassment claim to “include a bold, prominently placed notice that although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is sufficiently identified.”

Mandatory Severance Pay in Certain Plant Closings

New Jersey’s plant closure law (The Millville Dallas Airmotive Plant Job Loss Notifications Act) is similar in many respects to the federal plant closing law, WARN. Both laws apply to employers with 100 or more employees and require 60 days’ advance notice of a plant closure or mass layoff. New Jersey’s law also provides that employees be paid a week of severance pay for each year of service if their employer fails to give the required 60-day notice. A proposed bill that has passed in the New Jersey Senate would radically expand the state plant closing law.

Senate Bill No. 3170 would increase the notice period for covered plant closings, employment transfers, or mass layoffs from 60 days to 90 days. It also mandates severance pay of one week of pay per year of service, regardless of whether proper notification is provided to employees. Employers who fail to provide the required 90 days of notice, however, will be required to pay each affected employee an additional four weeks of severance pay.

The bill also addresses businesses that change ownership through a change of control or bankruptcy filing. In such cases, the successor employer must retain employees at their current compensation levels for at least 180 days following the change of control, unless a reduction in the workforce is approved by the Commission of Labor.

Employers Prohibited from Obtaining, Requiring, or Discriminating Based on Credit Reports

Senate Bill No. 545 was passed in the Senate last year and is now up for hearing in the Assembly. This bill prohibits employers from requiring credit checks on current employees or job applicants unless required to do so by law or the employer believes the employee has engaged in activity that is financial in nature and against the law. It also prohibits discrimination based upon information that is obtained from a credit report.

The bill does allow obtaining credit reports for those positions in which credit history is a bona fide occupational qualification. The following types of jobs would be included in this definition, where the position:

  1. Is a managerial position that involves setting the financial direction or control of the business;
  2. Involves access to customers’, employees’, or employers’ personal belongings, financial assets, or financial information other than information customarily provided in a retail transaction;
  3. Involves a fiduciary responsibility to the employer including, but not limited to, the authority to issue payments, transfer money, or enter into contracts or involves leases of real estate property;
  4. Provides an expense account for travel; or
  5. Is a law enforcement officer for a law enforcement agency in this state or governmental or non-governmental security personnel, including security personnel in homeland security agencies.

Paid Sick Leave Act Final Rules

Last but not least, we await the final rules on the New Jersey Paid Sick Leave Act. The New Jersey Department of Labor and Workforce Development had a public hearing on the proposed new rules on November 13, 2018, and written comments were accepted by the Department until December 14, 2018. The issuance of final rules, which hopefully will address many unanswered questions about this important law, should be forthcoming in the near future.

As you can see, New Jersey’s lawmakers have been very busy. As always, we will keep you posted on any developments with these new or pending laws. If you have any questions about this post or any other related matters, please contact me at ptcollins@norris-law.com.