NJCJI Legislative AlertThe New Jersey Civil Justice Institute strongly opposes the so-called “wage theft” bill the Assembly Labor Committee is holding a hearing on Monday. A862 does much more than protect employees against wage theft, which is, of course, already illegal. As amended, this bill would impose massive penalties on businesses who make well-intentioned errors on contentious questions, like the independent contractor/employee distinction, and would provide a backdoor for getting all the worst aspects of the pending “paid sick leave” legislation enacted.


This bill has been described as a mere strengthening of procedures and penalties, designed to help employees who have been victims of wage theft, and indeed the original bill, A862, appears to be a serious effort targeted at employers who have failed to pay employees their wages.


Even the latest version of the committee substitute, on the other hand, would do much more.  In fact, it would interfere in a number of disputed areas of legal policy, and apply extraordinary penalties to what are actually nuanced questions of law, exposing employers engaging in good faith employment practices to an unwarranted risk of liability.


 A Backdoor to Paid Sick Leave

The committee substitute would regulate voluntary paid sick leave programs as “wages” protected under this bill, with all of the presumptions and severe penalties currently found in pending paid sick leave legislation.  The ninety-day presumptive window when any “adverse action” taken with respect to an employee disputing a sick leave decision or even discussing rights to sick leave with another employee, coupled with triple damages plus attorney fees and court costs, would present a significant new risk of unwarranted liability for those employers who voluntarily offer this benefit.


These aggressive liability provisions would deprive employers of the very flexibility that has enabled the vast majority of employers in this state to offer generous sick leave policies.


Incentivizing litigation over the manner in which leave is offered would deprive employers of the flexibility to manage timing or abuse, and would encourage businesses to scale back or even eliminate sick leave, harming the very employees this bill seeks to help.


 A862 Goes Well Beyond Wage Theft

To be clear – deliberate “wage theft” is already, of course, illegal.  If legislators believe the existing law is not good enough, the original A862 would provide significant new remedies for employees who have not received timely agreed upon wages.  The committee substitute, by contrast, would go well beyond penalizing willful bad actors, and would bring an extraordinary hammer down on one side of a number of nuanced legal policy disputes, to the detriment of businesses, employees, and independent contractors alike.


The New Jersey Civil Justice Institute strongly opposes this deceptive “wage theft” bill, and will be testifying against it on Monday.