The minimum expectation of any employee working for an employer is that they will be paid on a regular basis, and the check or direct deposit will reflect the entire amount of what they earned, including overtime pay.
Unfortunately, that is not always the case with employers when it comes to the compensation their employees are entitled to under the law.
Clarification from a federal court
A recent ruling by the New Jersey federal court clarified a six-year statute of limitations involving state law that regulates administrative duties for employers that specifically include:
- Mode of payment
- Payment by direct deposit
- Lawful deductions
- Wage and hour records
In the decision, the court ruled that employers are mandated to pay wages on regularly scheduled paydays twice per month. Payment must be made within ten days of the pay period’s end where wages were earned. Paydays that occur on non-workdays where their work location is closed must be made before, not after the workdays. The only exceptions involve the existence of an active collective bargaining agreement.
Staff members who quit, are terminated, or are involved in a labor dispute are still entitled to their pay during the pay period of the separation. The amount also includes partial compensation via an incentive program paying a reasonable, approximate amount of wages due with the entire amount paid to them following full computation of the earned wages.
Even in employer-employee pay disputes, the worker still must receive the compensation the employer concedes to owing in a timely fashion with no conditions.
Wage deductions also have restrictions that prohibit the employer from withholding money for:
- Cash shortages
- Property that is damaged or lost
- Uniform purchases
- Mandated tools to perform daily tasks
The only wages that are subject to withholdings or diversion are employee-authorized deductions or collective bargaining agreements. However, even with this recent ruling, employers may still find “creative” ways to avoid compensating their workforce in full.