New Jersey Considering $15.00 Minimum Wage

New Jersey Considering $15.00 Minimum Wage

The minimum wage that employers may pay employees varies significantly from state to state. Some states still follow the federal minimum wage of $7.25 per hour, while states like Washington require a higher minimum wage of $12.00 per hour as of 2019. Several states have implemented legislation that gradually increases the minimum wage over several years, and New Jersey legislators are considering a proposed bill that would do the same.

NJ A15 was introduced in December 2018 and aims to raise the state minimum wage of $8.85 per hour incrementally until it eventually reaches $15.00 per hour. On January 24th, the Assembly Labor Committee approved a revised version of the bill, and other legislative committees must also vote to approve the bill. The full Assembly and Senate must both pass the bill and Governor Phil Murphy would have to sign it before the increases are formally implemented.

Details of the Bill

The bill sets out a specific schedule for minimum wage increases, as follows:

  • Increase to $10.00 per hour on July 1, 2019
  • Increase to $11.00 per hour on January 1, 2020
  • An additional increase of $1.00 per hour each January 1 until it reaches $15.00 in 2024

If the bill passes, employers should all be ready to start paying the new $10.00 minimum wage as of July. Employees should pay close attention to their wages to ensure their employers are not violating their rights under the new law.

There are some exceptions to the law, such as the fact that tipped employees will have a lower hourly wage and will need to reach $15.00 per hour based on a combination of wages and tips. The scheduled increases will be different for agricultural workers, seasonal workers, and for companies with five or fewer employees. Agricultural workers will receive a $12.50 minimum wage by 2024 when the legislature will examine whether a further increase is warranted. Employers utilizing seasonal workers and small companies will have until 2026 to reach $15.00.

If an employee is in training and not performing job duties at full capacity, employers will be allowed to pay a training wage starting in 2020. This training wage must be at least 90 percent of the applicable minimum wage for up to 120 hours of training. This is intended to ease the burden of regular increases on employers, though, after 120 hours, employers will need to ensure they are providing the right compensation under wage and hour laws. If you have reason to believe that your employer is not paying you the required hourly wage or overtime, never hesitate to discuss the matter with a knowledgeable employment lawyer.

Contact an Experienced New Jersey Wage and Hour Lawyer to Protect Your Rights

At Traub Law Employment Attorneys, we will be closely watching all new developments regarding the minimum wage bill. When significant changes to wage and hour laws occur, there is always a chance that certain employers may fail to comply, denying you of your rightful compensation. If you believe your rights have been violated by your employer, (609) 951-2204 or contact us online today to speak with a New Jersey employment lawyer.

NY Rejects Non-compete Agreements for Rank and File

Many states courts and legislatures across the country have recently acted, through rulings, investigations and pending legislation, to limit the application and enforcement of non-compete clauses in an effort to protect workers who are in an unfair bargaining position with their employers.  For example, the New York Attorney General (NYAG) has recently conducted a number of investigations into the “rampant use” of non-competes by companies that seek to restrict the post-employment activities of nearly its entire workforce, and not just those employees who are highly skilled or have specialized knowledge.

New York courts generally disfavor restrictive covenants and will only enforce non-competes that are necessary to protect an employer’s legitimate interests, do not impose an undue hardship on the employee, do not harm the public, and are reasonable in duration and geographic scope.  New York generally recognizes that employers have a legitimate interest in protecting their businesses from the disclosure of trade secrets, client lists and confidential information as well as the potential loss of its highly skilled workforce. But many companies have been overreaching with their use of non-compete agreements.  That is, they are mandating that even low-level employees, those without specialized skills or access to proprietary confidential information sign non-compete agreements that restrict their ability to accept another job even when they were terminated from their current job through no fault of their own (not for “cause”).  Many states, such as New York, are acting to prevent the negative economic impact of non-compete agreements and their restraint of trade and job mobility.  The NYAG’s office announced in September 2018 that it reached a settlement with WeWork, a co-working and office space company, in which WeWork agreed to completely eliminate or curtail overly broad non-compete agreements for nearly all of its 3,300 employees. WeWork required all employees, even cleaning staff and receptionists to sign non-competes as a condition of employment.  As part of the settlement, the company is now dropping the non-compete agreement requirement except for a few high-level executives.  Moreover, the NYAG has reached similar settlements with other large companies in an effort to eliminate the broad use of post-employment non-compete agreements for their low-level employees.

In response to growing misuse of non-compete agreements, the NYAG also released “Non-Compete Agreements In New York State – Frequently Asked Questions.” This guidance provides easy-to-understand answers to common questions workers have regarding the law on non-competes.

The overly broad application of non-competes to low-wage employees prompted the NYAG to propose legislation which would ban non-competes for employees earning below $75,000 per year. Assemb.B.A7864A, 2017-2018 Legislative Session (N.Y. May 17, 2017).  There are currently no New York statutes governing the general enforceability of non-competes but industry specific proscriptions do exist (i.e., for broadcasting, attorneys and within the financial services industry).

New York and New Jersey Employers should review their current non-compete agreements with employment counsel, in light of the above, to ensure that they have not reached too far in trying to protect valuable trade secrets, proprietary and confidential information.

Severe Misconduct Disqualification Eliminated from NJ Unemployment

Severe Misconduct Disqualification Eliminated from NJ Unemployment

I am pleased to report that the New Jersey legislature has finally repealed the extraordinarily unfair and misapplied severe misconduct disqualification standard in the State’s unemployment statute. Governor Christie and his lieutenants had concocted, in 2008, this additional mode of disqualifying applicants as a revenue raising, budget balancing tactic.

Governor Murphy signed this bill on August 24, 2018 and it takes effect immediately.  The new law corrects many unworkable and unfair provisions of the unemployment statute, such as:

  • There are no longer three tiers of misconduct disqualification (“simple”, “severe” and “gross”);
  • There will now be only two tiers of misconduct (“misconduct” and “gross misconduct”);
  • The misconduct disqualification will be shortened from 8 weeks to 6 weeks;
  • The only total disqualification will be for “gross misconduct,” which requires the commission of an act that rises to the level of a crime;
  • It includes a more cogent definition of “misconduct.” The bill provides that “Misconduct” means conduct which is improper, intentional, connected with the individual’s work, within the individual’s control, not a good faith error of judgment or discretion, and is either a deliberate refusal, without good cause, to comply with the employer’s lawful and reasonable rules made known to the employee or a deliberate disregard of standards of behavior the employer has a reasonable right to expect, including reasonable safety standards and reasonable standards for a workplace free of drug and substance abuse.” and
  • The employer has the burden of proof to demonstrate “misconduct.” Prior to a determination by the Department of misconduct, the employer must provide written documentation demonstrating that the employee’s actions constitute misconduct or gross misconduct.

I am particularly pleased to see the revisions regarding the burden of proof necessary to establish misconduct.  I have represented many employees who were wrongfully denied the receipt of critical unemployment benefits based on their own testimony when the employer failed to appear.  Moreover, the Department will not be able to rule against the claimant employee without adequate written documentation from the employer.

Should you have any questions regarding the above changes in the NJ State Unemployment statute, please contact a knowledgeable New Jersey employment lawyer.

NJ Bill Prohibits Restraints on Litigating Discrimination Claims

NJ Bill Prohibits Restraints on Litigating Discrimination Claims

The NJ Senate recently introduced legislation, no doubt intending to improve the rights of employees who have discrimination claims, by requiring more transparency in litigating these claims. This bill, S3581, provides that provisions in an employment contract that waive “any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment” are contrary to public policy and would be unenforceable. Furthermore, this bill would prohibit any “prospective waiver of rights or remedies” such as a jury trial or mandatory arbitration of discrimination claims under the New Jersey Law Against Discrimination (“LAD”).

This bill also contains a provision designed to eliminate non-disclosure provisions in agreements resolving claims under the LAD. It deems these clauses as against public policy and therefore unenforceable.

Moreover, the bill prohibits an employer from taking retaliatory action (e.g., refusal to hire, discharge, suspension, or demotion) on the grounds that an individual refuses to enter into an agreement with terms contrary to the above.

Lastly, to the extent an employer seeks to enforce an agreement contrary to the bill, the employee may collect costs and reasonable attorney’s fees for defending against any such suit.

The bill would affect settlement agreements prospectively (not those entered into prior to the effective date specified). It also does not apply to the terms of collective bargaining agreements.

If passed, this bill would likely dramatically affect litigation and strategy of claims brought under the LAD. The inability of an employer to utilize arbitration procedures or insist upon confidentiality in settlement agreements may result in fewer out-of-court resolutions and more protracted and costly litigation. This is a double-edged sword for both employers and employees. That is, many employees would prefer to have their claims resolved privately without having to endure a long and public court battle.

Executive Pension Plans: Bargaining Power Not Top Hat Plan Element

Executive Pension Plans: Bargaining Power Not Top Hat Plan Element
December 2017

The 3rd Circuit in Skiora v. UPMC et al, revisited the substantive requirements of a “top hat” plan in deciding whether Plaintiff, Paul Skiora, was entitled to recover pension benefits from his former employer’s supplemental benefit plan.

Skiora, was a Vice President of the University of Pittsburgh Medical Center (“UPMC”) from 2005-2011.  Upon his voluntary termination of employment, Skiora applied for benefits under UPMC’s Non-Qualified Supplemental Benefit Plan (the “Plan”).  UPMC argued that the Plan was a “top-hat” plan exempt from many of the substantive provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).  Because three of Sikora’s claims relied on ERISA provisions inapplicable to top-hat plans, UPMC argued that his claims should be dismissed.  The District Court concluded that the Plan was a top-hat plan and granted summary judgment to UPMC.  Skiora appealed to the 3rd Circuit.

This case is noteworthy for its thorough discussion of the definition of top hat plans, including a review of the regulatory and case law involving this issue.

ERISA defines top-hat plans as those that are “unfunded and maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.”  29 U.S.C. §§1101(a)(1), 1051(2), 1081(a)(3).  Skiora did not dispute that the Plan was unfunded and maintained by UPMC for the purpose of providing deferred compensation.  Rather, Skiora claimed that the Plan did not meet the requirements of a top-hat plan (and therefore should be subject to ERISA’s substantive provisions) because it was not maintained for a “select group.”  The 3rd Circuit previously described this “select group” element as having “both quantitative and qualitative restrictions.  In number, the plan must cover relatively few employees.  In character, the plan must cover only high-level employees.  Since only .1% of UPMC’s entire workforce participated in the Plan during the relevant time period, the Court found that the Plan met the quantitative restriction of “select group.”

As to the qualitative restriction, the statute requires participants to be members of a select group of management or highly compensated employees. The Court found that the Plan covered high-level employees who were both a select group of management and highly compensated employees (most Plan participants earned at least 4 times the average annual salary of all UPMC employees).

Skiora argued that, notwithstanding the fact that the quantitative and qualitative restrictions of the “select group” element were satisfied, the Plan doesn’t cover a “select group” because there is no evidence regarding the “bargaining power” of the Plan participants. Skiora was effectively arguing for a third component to the “select group” element.  Skiora relied on a 1990 Department of Labor (“DOL”) opinion letter to support this argument. The 3rd Circuit in Skiora disagreed.  Rather, the Court found that the DOL opinion letter does not require that participants in a top-hat plan possess bargaining power to design or negotiate their deferred compensation plan.  The Court stated that the opinion letter explains Congress’s intent for creating top-hat plans:  a select group of high level employees do not need all of the protections ERISA affords because they presumably possess bargaining power by virtue of their position or compensation level.  Therefore, the Court held, in Skiora, that plan participants’ bargaining power is not a substantive element of a top-hat plan and affirmed the judgment of the District Court.

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Coming Forward with Sexual Harassment Claims

Weinstein, Ailes, Uber: Coming Forward with Sexual Harassment Claims

Weinstein, Ailes, Uber: Encouraging Women To Report Harassment             Recent headlines are rife with salacious stories of powerful men sexually harassing female subordinates in the workplace.  But what is even more troubling to me than the details of the predatory behavior, is the complicity of co-workers, supervisors, senior executives and even outside Board members in keeping the allegations private so that business can continue as usual.  This culture of sweeping things under the rug and prioritizing the status quo greatly inhibits the ability to make positive, real change in this area.

Women will only have the courage to come forward with their claims of sexual harassment if they are confident that they won’t be retaliated against for reporting the incident.  How can a woman be so sure of this?  It is only when they can see that other women who have reported harassment in the past suffered no adverse employment consequences, such as demotion or termination.  This type of transparency is impossible when a company forces its employees to sign a mandatory arbitration clause or agreement that prohibits the employee from disclosing the fact of and details of the case.

With an arbitration agreement, the employee who brings a sexual harassment claim is prevented from bringing the case to a court of law, often in front of a jury of her peers. Arbitration agreements are very popular with employers who hope that they will resolve employment disputes more quickly and less expensively than litigation. Yet, as Gretchen Carlson explains in her recent NYTimes op ed piece these arbitration clauses overwhelmingly benefit employers since, studies show that many arbitrators find in favor of the employer and not the employee.  Moreover, even if an employee does prevail in arbitration they are bound by confidentiality provisions not to reveal their claims. This will also benefit the employer since it can continue to protect the harasser. Conversely, when an employee prevails in a judicial setting, the decision is part of a public record.  Public disclosure would likely prompt a company to take appropriate remedial measures to address the harassment and the harasser.  Women can then more confidently rely on Company assurances that no retaliation will occur upon a report of sexual harassment.

Confidentiality provisions are appropriate in the pre-litigation settlement context where neither the victim or the alleged harasser have had a chance to call witnesses and the claims adjudicated in accordance with the applicable legal standard of review.

 

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Worker Who Quits for a Better Job May Still Get Unemployment Benefits

Worker Who Quits for a Better Job May Still Get Unemployment Benefits

September 2017

Unemployment benefits
I was pleased to read that the NJ Appellate Division gave a fair reading to a recent amendment to the NJ unemployment compensation statute in order to award benefits to a displaced worker.

In McClain v. Board of Review, the Appellate Division overturned the New Jersey Board of Review’s denial of unemployment benefits to Patricia McClain who left her job as a teacher at one private school to take a job at another – but then found herself unemployed after the second school rescinded its offer of employment.

McClain applied for unemployment benefits after she learned that her new job offer had been rescinded.  Her claim was denied and she appealed.  The Appeal Tribunal affirmed the denial of benefits, holding that she was disqualified from receiving unemployment compensation benefits because she left her first job “voluntarily without good cause attributable to such work.”  The Appeal Tribunal also noted that there is a recently enacted exemption from the disqualification for an individual who voluntarily leaves work with one employer to accept from another employer employment which commences not more than seven days after the individual leaves employment with the first employer, if the employment with the second employer has weekly hours or pay not less than the hours or pay of the employment of the first employer [and the employee is terminated from the second job.]  The Appeal Tribunal determined McClain was not covered by the exemption because she did not actually commence employment with the second employer within seven days of her last day of employment at the first employer.  She was scheduled to start with the second employer within the seven days, but that offer was rescinded before she could start.  The Appeal Tribunal determined McClain was not covered by the exemption because she did not actually commence employment with the second employer within seven days of her last day of employment with the first employer.

The Board of Review, on appeal, also denied McClain’s application for unemployment benefits on the same grounds.

The three-judge Appellate Division panel, disagreed, and held that “a claimant need not actually start the new employment to be exempt from disqualification.”  The Court said the issue was a question of interpretation, and added that the statute should be interpreted liberally so as not to penalize workers who leave one job for another that pays better.  They also noted that 26 other states have adopted similar statutes and interpreted them similarly.  Finally, the Court noted that there was nothing in the legislative record to support the imposition of a condition that a claimant begin working the new job within seven days in order to be eligible for benefits.

 

 

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New Jersey Pregnancy Discrimination Case Can Be Heard By Jury

New Jersey Pregnancy Discrimination Case Can Be Heard By Jury, August 2017

Wrongful Termination Case

The New Jersey Appellate Division has ruled, in Roopchand vs. Complete Care, et al, that a pregnant medical technician presented a prima facie case of pregnancy discrimination in her wrongful termination lawsuit when her former employer fired her for refusing to climb a ladder because her pregnancy was “high-risk.”

The Appellate Division reinstated Roopchand’s suit on August 3, 2017, after the Superior Court dismissed the case, holding that the employer articulated a legitimate, nondiscriminatory reason for Roopchand’s firing, her insubordination.

Sandra Roopchand worked at the medical office in 2013 and 2014.  Her duties included both patient care and administrative duties.  Her normal duties did not include cleaning windows.  During her employment, plaintiff was never disciplined. In July 2014, she told Dr. Schaller, one of the two owners of the medical practice, that she was pregnant and that her pregnancy was high-risk, requiring her to see her obstetrician weekly.  Later in the month, the Defendants reduced Roopchand’s work hours to a part-time schedule.  The next day, she overheard Dr. Schaller telling the other owner, Dr. Fallon, “I don’t care, she’s a liability.”  When Roopchand was busy working with a new patient who needed bloodwork and X-rays, Dr. Fallon came up to her and asked her to wash the windows on the second floor office.  She told him, “I don’t do windows.”  Roopchand testified that she did not think the doctor was serious about her washing the windows since it was not part of her job description nor was it something she had seen anyone working in the office do before.  Moreover, she would have had to get up on a ladder to clean the floor to ceiling windows.  Dr. Fallon asked her two more times, and she refused again, so he fired her.

The lower court had dismissed this case, finding that Roopchand’s refusal to follow Dr. Fallon’s directive to wash the windows constituted insubordination, and was a legitimate, nondiscriminatory reason for her firing.  The court rejected Plaintiff’s claim that this was just a “pretext,” or an excuse to cover up the real, discriminatory reason for the termination.  The court also noted that Ms. Roopchand’s doctor had not placed her on any work restrictions when she refused to wash the windows.

On appeal, the three judge, all female, panel looked to the Pregnant Workers Fairness Act (PWFA), which modified the New Jersey Law Against Discrimination to incorporate “pregnancy” as a protected characteristic, for guidance.  The Court held that Roopchand made out a prima facie case for disparate treatment under the PWFA because she was part of a protected class of pregnant workers and her employer knew of her pregnancy; she was performing her work duties; she suffered the adverse employment action of being demoted to part-time status, ordered to wash windows, and then fired; and she was required to perform an act outside the scope of her job description, that other non-pregnant employees were not required to perform, thereby raising an inference of unlawful discrimination.

The Court held that, regardless of whether Roopchand’s request to visit her doctor weekly is viewed as a pregnancy accommodation, she demonstrated sufficient evidence of pregnancy discrimination to survive summary judgment.

This case noteworthy because reversals on appeal of summary judgment are rare.  The case will go back to the Law Division for a trial in the fall.

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Practice Tips for a Successful Workplace Investigation

Practice Tips for a Successful Workplace Investigation
Former Uber engineer Susan Fowler Rigetti’s story of sexual harassment and the company’s inadequate response to her multiple complaints, highlight how important it is for a company to have an effective action plan in dealing with these sensitive issues.

The following is some practice pointers on what a company should do (and not do) when it receives an employee complaint of discrimination/harassment or other misconduct by another employee:

  1. Understand the complaint

Before taking action, it’s important to understand what the employee is complaining about. The company must know who is involved, what is alleged to have happened, as well as when, where and, if possible, why it occurred. The company should try to understand what the complainant is seeking without making any promises or assurances regarding how it will resolve the complaint.

  1. Should the company investigate?

Investigations can involve a significant allocation of time and financial resources so before a company conducts an internal or private outside investigation into a complaint, it should consider whether it is appropriate for an investigation to be undertaken or whether there is a better option for resolving the complaint – such as mediation of an interpersonal disagreement between colleagues.

  1. Review policies and procedures

Many employers have policies and procedures enacted that provide guidance or structure about how a workplace complaint should be handled or an investigation conducted. Therefore, once a complaint is received, the company should review its policies and procedures to ensure it is in compliance.

  1. Appointing an investigator

 The decision of whether to appoint an investigator or not should be made on a case-by-case basis. Although, it is less expensive to designate an internal investigator, there are times when a company should hire an outside investigator. The outside investigator is perceived as more neutral and may have greater expertise in conducting investigations and drafting investigation reports. Many companies hire an experienced attorney to serve as an outside investigator since the attorney is skilled at interviewing witnesses, making credibility assessments and writing effective reports.

  1. Keep the lines of communication open

If the employer undertakes an investigation into the complaint, it should take care to keep the lines of communication open with all of the involved parties. By actively managing expectations, the company can minimize some of the stress that is often associated with an investigation.

  1. Weighing and Assessing the Evidence

 Assessing conflicting evidence provided by investigation participants is a daunting task for many investigators. In addition to interviewing witnesses, the interviewer should review emails, file notes and other relevant documents or recordings. To the extent there is conflicting testimony given by witnesses, the investigator should make a credibility assessment in weighing the evidence. Sometimes a finding cannot be made and the investigation should properly be labeled as “inconclusive.”

  1. Take action

Once an investigation is concluded, a company should ensure that it promptly communicates the finding of the investigation to the parties involved. Where the investigation findings are likely to result in disciplinary action for an employee, the company will need to ensure that the employee is afforded procedural fairness throughout the disciplinary process. Even when an investigation has been inconclusive, there are still steps that could be taken, such as trainings on appropriate workplace behavior.

  1. Reassess

After the investigation is concluded, the company should review its policies, procedures, practices and on-going employee trainings to see whether its overall process in handling these sensitive employee complaints can be improved upon and whether an outside professional can assist with this process.

Rina Traub, of Traub Law in Princeton & East Brunswick, NJ,  is an experienced counselor and advocate for New Jersey’s executives, professionals and business owners.
Ms. Traub also counsels businesses on employment matters, including legal compliance, handbooks, and employer/employee relations.  For Workplace Investigations, Contact her at (609) 951-2204.

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Third Circuit Rules Workers Age 50+ Can Be Considered Subgroup in Testing for Discrimination

Third Circuit Rules Workers Age 50+ Can Be Considered Subgroup in Testing for DiscriminationThird Circuit Rules Workers Age 50+ Can Be Considered Subgroup in Testing for Discrimination

New Jersey’s Third Circuit recently held in Karlo v. Pittsburgh Glass Works, LLC, No. 15-3435, 2017 WL 83385 (3d Cir. Jan. 10, 2017), that workers in their 50s may be recognized as a “subgroup” of employees protected by the Age Discrimination in Employment Act (“ADEA”) if an employer’s policies inadvertently disfavor them relative to their co-workers who are over age 40 and, therefore also protected employees under this law.

The plaintiffs in Karlo were all over age 50 and had worked in defendant’s Manufacturing Technology division until they were terminated in 2009 as part of a reduction in force. Plaintiffs then brought a collective action under the ADEA, asserting disparate treatment, disparate impact, and retaliation as to two of the plaintiffs. The district court granted the employer’s motion for summary judgment on the disparate impact claim, holding that a disparate impact claim for the “fifty-and-older” subgroup relative to their younger yet age-protected co-workers was not permitted under the ADEA because the law does not permit subgroup claims. The court also found that plaintiffs lacked evidence to support their claim.

The Third Circuit reversed the district court’s ruling on summary judgment and held that the plaintiffs could pursue their claims. According to the court in Karlo, plaintiffs are permitted to use subgroup comparisons and similar evidence to demonstrate the significantly disproportionate adverse impact necessary for a disparate impact claim under the ADEA. The appeals court emphasized that the ADEA prohibits age discrimination as a whole, not just discrimination against employees ages 40-and-over. Thus, the court found that the plaintiffs are permitted to bring claims alleging that they were treated less favorably than their younger counterparts, even where their younger co-workers included employees within the ADEA’s protected class.

This decision represents a departure on this issue from several other circuit courts that have previously not allowed such “subgroup” claims. The United States Supreme Court may need to resolve this split. As always, we will update this blog should the Court consider this issue in the future.

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