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Investigation Process
When a wage claim is filed with the Division of Wage and Hour Compliance against an employer, it is first reviewed by a supervisor to determine whether the Division has jurisdiction. Depending on the nature of the claim, the claim will either be assigned to a field investigator, handled by mail, or referred for a Wage Collection proceeding.
If the claim is assigned to a field investigator, the investigator will contact the employer to make an appointment to inspect the employer’s records. Usually, the investigator will want to see the employer’s records for at least 24 months prior to the inspection. At the agreed upon appointment time, the investigator will review the records and conduct interviews if necessary. At the completion of the inspection, the investigator will advise the employer of any violations and back wages which are due.
The employer will then be sent a notice (Assessment Letter) with the findings and any fees or penalties which are due. The investigator has no control over the amount of fees and/or penalties; they are determined after the case has been submitted and reviewed by a supervisor.
If the employer disagrees with the findings, he or she can request a conference and the investigator's supervisor will contact the employer to explain the violations, laws or regulations, wages, fees and penalties. After this discussion, if the employer still disagrees, he or she may be scheduled for a conference with a Section Chief. These conferences are normally held by telephone to minimize the impact on the employer’s business operations.
If the telephone conference does not resolve the matter, or a telephone conference was not available, the employer will be scheduled for a hearing before a Hearing and Review Officer. Normally, these hearings are held in Trenton; however, if this presents a hardship, the employer can request an alternate location.
If the claim is handled by mail, the employer will be sent a copy of the claim and given the opportunity to either pay the wages due or explain why the wages are not due. If the employer does not agree that any wages are due, the complainant will be notified and will have the option of pursuing the matter through the Wage Collection proceeding process. (See section on Wage Collection proceedings below.)
Note: claims that are handled by mail usually only involve one person (for example, a former employee who did not receive their last paycheck).
If the claim is referred to the Wage Collection section, the employer will be notified of the date, time, and location of the hearing. Wage Collection proceedings are usually held in person in Trenton; however, alternate locations are available if travel to Trenton would prove to be a hardship. The maximum amount of a Wage Collection award is $50,000 and complainants must waive any amount over $50,000. They can pursue any amount over $50,000 through regular legal processes.
At the hearing, the Wage Collection Referee will gather all of the pertinent facts and will make a decision. If a Wage Collection decision is appealed by either the complainant or the employer, the case is sent to The Superior Court of New Jersey where the appeal will be heard.
Note: wage claims that involve any kind of benefit that arises from an employment contract (for example, vacation, holiday, expense reimbursement, commission, severance or bonus pay) will be referred for a Wage Collection proceeding. There are also instances when a complainant will have the option of pursuing a claim through a Wage Collection proceeding.
When it is determined that an employee is due back wages or when it is determined that there is a violation of any of the laws and regulations under the jurisdiction of the Division of Wage and Hour Compliance, the employer is sent an Assessment Letter. This letter spells out in detail the wages, fees, and penalties which are due.
“Wages” are unpaid wages that the investigator has determined are due. The wages may represent unpaid hours of work, unpaid overtime hours, or payment of less than prevailing wage. This part of the Assessment Letter is self-explanatory and includes the name or names of the persons to whom wages are due. The employer has the right to either pay these wages directly to the employee or submit payment to the Division, and, in turn, the Division will disburse the wages. Employers should follow the instructions on the notice that explain how the checks must be prepared and/or what proof of payment must be supplied to the Division.
If an employer also owes a fee, the fee will be a percentage of the wages that are due. The employer will not be charged fees if no wages are due. The amount of the percentage varies depending upon the employer’s violations history. The first violation results in a fee of 10% of the unpaid wages; a second offense results in an 18% fee; and a third or more offense results in a 25% fee. The fees are paid directly to the State to offset the costs of the investigations. Fees are statutory in nature and are not subject to negotiation.
If the employer also owes a penalty, the amount of the penalty will vary depending upon the severity of the offence, the number of employees impacted, and the employer’s history of violations. Each employer has to be treated individually, and there is no "one size fits all" penalty schedule. The penalties are not determined by the individual investigator, and it is not within the investigator's jurisdiction to discuss the amount of penalties. The penalties are applied after the investigator submits the case and the supervisor reviews the case and the employer history and determines the amount to be assessed. Some penalties are statutory in nature and are not subject to negotiation.
