Wage and Hour Compliance FAQs (for Employers)
The following are frequently asked questions applying to most employers.
Q. Are all employees working in New Jersey covered by the laws enforced by the Division of Wage and Hour Compliance?
A. No. The Division of Wage and Hour Compliance does not have jurisdiction over state, county, or municipal government, or Board of Education employees, except under the Child Labor Law. These employees fall under the jurisdiction of the Federal Wage and Hour Division and must contact the U.S. Department of Labor at (609) 538-8310.
Q. Can a complaint be filed anonymously?
A. Yes. If the complaint is filed anonymously the person filing the complaint will not receive any information about the complaint unless a resolution is reached and wages due are sent as part of the resolution.
Q. Will you tell me the name of the employee who filed a complaint?
A. It depends. During a regular field investigation, staff in Wage and Hour Compliance will try not to reveal the complainant's identity. Once the case is investigated and closed, you have the right, under the Open Public Records Act (OPRA), to request all information on the complaint; however, we will endeavor to protect the identity of a complainant or witness to the maxim extent allowable by law.
Q. Can a group of employees jointly file a complaint?
A. No. Only individuals may file a wage complaint. Each individual must file a separate complaint.
Q. Is there a statute of limitations for filing a wage complaint?
A. Yes. There is a six (6) year statute of limitations on complaints for unpaid minimum wage, overtime, and all other complaints.
Q. Can a bona fide independent contractor file a wage complaint?
A. Independent contractors are not covered by the NJ Division of Wage and Hour Compliance. A bona fide independent contractor must bring the complaint to the small claims court in the county where the employer resides or conducts business. If you are unsure whether you are a bona fide independent contractor, it is advisable for you to file a complaint so that a determination can be made as to whether the Division can assist you with your complaint.
Q. What happens after a complaint is filed?
A. The complainant is sent an acknowledgment letter and the complaint is reviewed by a supervisor. Depending on the nature of the complaint, the complaint will be assigned to a field investigator, handled by mail, or scheduled for a Wage Collection proceeding.
- Assigned to a field investigator: if the complaint is assigned to a field investigator, the field investigator will contact you to make arrangements for an inspection.
- Handled by mail: if the complaint is handled by mail, you will be sent a copy of the complaint and given the opportunity to either pay the wages due or explain why the wages are not due.
- Scheduled for a Wage Collection proceeding: if the complaint is scheduled for a Wage Collection proceeding, you will be notified of the date and time of the proceeding. The Wage Collection section will determine whether to schedule an in-person or telephone proceeding. Most in-person proceedings are held in Trenton; however, other locations are available upon request.
Q. Will I be notified of the results of the investigation?
A. Yes. After we complete the investigation, you will be notified of the results. If it is determined that wages are due, you will be notified in writing and will be sent an Assessment Letter explaining the wages, fees, and penalties. You will have the option to issue the payment (wages due) directly to the employee or send payment to us, which we will forward to the complainant. Any fees or penalties that are assessed must be sent directly to the Division.
Q. What happens if I disagree with the results of the investigation?
A. Part of the Assessment Letter provides an opportunity for you to respond and request a conference. Complete this section on the form and return the form to the Division.
Q. What happens after I send in the form saying I disagree with the results of the investigation?
A. The case will be reviewed by a supervisor who will contact you to explain the violations, the laws or regulations, and the wages, fees, and penalties which are due.
If after this discussion you still disagree with the results of the investigation you may be scheduled for a conference with a Section Chief. These conferences are normally held by telephone to minimize the impact on your business operations.
If a conference with the Section Chief is not possible or if the conference is held and you still disagree with the results of the investigation, you will be scheduled for a hearing before a Hearing and Review Officer. These hearings are held in person and are normally held in Trenton; however, if this presents a hardship, you can request an alternate location.
Q. If the investigation reveals that there are undocumented workers, what will happen?
A. The Division of Wage and Hour Compliance does not investigate or inquire into the legal status of any worker. The Division applies New Jersey's labor laws without regard to a worker's legal status. The Division does not share information with "Immigration.”
Q. How much is the minimum wage in New Jersey?
A. Effective January 1, 2023, the New Jersey minimum wage is $14.13 per hour for most workers. Please refer to New Jersey's Minimum Wage Chart for scheduled increases.
Q. Are all employees required to be paid the minimum wage?
A. Most employees have minimum wage protection under the law. There are exceptions, such as automobile salespersons, outside salespersons, and minors under the age of 18, except for minors working in retail, food service, the first processing of farm products, beauty culture occupations, laundry, cleaning and dyeing occupations, light manufacturing and apparel occupations, and hotel and motel occupations.
Q. Am I required to pay tipped employees the minimum wage rate?
A. The combination of salary and tips must equal at least the minimum wage per hour. Effective January 1, 2023, a required minimum hourly rate is $5.26 per hour. If the tips plus the hourly salary are less than the minimum wage per hour, the employer must make up the difference. Please refer to New Jersey's Minimum Wage Chart for scheduled increases.
Q. Am I allowed to reduce an employee's rate of pay?
A. Yes. You can reduce the rate of pay as long as you give the employee advance notice of the reduction. The reduction cannot be made retroactively for any time worked. Also, the reduction cannot bring the rate of pay below minimum wage.
Q. When do I have to pay overtime?
A. Overtime is paid at the rate of time and one half after forty hours of actual work in a seven-day workweek, with the exception of certain salaried employees who meet the definition of an executive, administrative, or professional.
Q. Do I have to pay overtime or double time to an employee working on a holiday, Saturday, or Sunday?
A. No. Overtime must be paid at a rate of time and one-half times the employee's regular rate of pay for each hour actually worked in excess of 40 hours in the workweek.
Q. If the employee works 40 hours during the week, plus gets 8 hours of holiday pay for a total of 48 hours in the week, do I have to pay overtime for the hours over 40?
A. No. Overtime pay is only required for actual hours worked over 40. Overtime must be paid at a rate of time and one-half times the employee's regular rate of pay for each hour actually worked in excess of 40 hours in the workweek.
Q. If an employee wants to work overtime (in excess of 40 hours in the workweek) and will accept straight time, can the employee waive the right to overtime pay?
A. No, the employee and the employer cannot mutually agree to violate the law.
Q. How do I compute the overtime rate for a worker who has two or more job titles with different hourly rates?
A. The overtime rate is calculated by using the weighted averaged method. The total gross wage is divided by the total number of hours worked to obtain the average hourly rate. The average hourly rate is then divided in half to determine the additional premium (half-time) rate due the employee.
An employee does clerical work for $12.00 per hour and is also a hostess for $9.75 per hour. The employee works 30 hours at $12.00 per hour and 16 hours at $9.75 per hour for a total of 46 hours during the week. The overtime rate due the employee is calculated as follows:
30 hours x $12.00 per hour = $360.00
16 hours x $9.75 per hour = $156.00
Total gross = $516.00.
The total gross ($516.00) is divided by the total hours (46) to obtain the average hourly rate. The average hourly rate is $11.22 per hour.
The employee is still due the additional premium pay (half-time) for the 6 overtime hours. The average hourly rate ($11.22) is divided in half. The half-time rate is $5.61. 6 overtime hours x $5.61 = $33.66
The $33.66 (premium pay) is added to the original gross amount of $516.00. The new gross amount is $549.66. This is the amount that must be paid to the employee for the week.
Q. Can I require employees to work overtime?
A. Yes. You can require an employee to work overtime provided you pay the appropriate wages and do not violate any existing employer-employee collective bargaining agreement.
Q. Can I require employees to work overtime if they are health care workers?
A. There are special regulations involving health care workers and mandatory overtime. Detailed information is available here.
Q. Am I required to give employees a statement of deductions?
A. Yes. Each time you pay wages, you must provide a statement of deductions listing the gross and net wages and all individually itemized deductions (such as taxes). This statement can be provided electronically or in hard copy.
Q. May I make a deduction from an employee's wages for shortages or breakage?
Q. May I make a deduction from an employee's wages if the employee has damaged company equipment?
Q. May I make deductions from an employee's last paycheck for failure to return company property such as an ID tag, cell phone, tools, etc.?
Q. Can I require an individual to pay for drug or other pre-employment testing or can I make a deduction from their paycheck for these costs?
A. No, unless you are hiring security guards. You cannot deduct the cost of drug testing, medical examinations, visual exams, etc. from the employee’s pay or require the employee or prospective employee to pay for this cost. However, the 2004 Security Officer Registration Act (N.J.S.A. 45:19A-1 et seq.) allows applicants for security guard jobs to be responsible for the payment of any registration costs with the State Police, which includes drug testing, fingerprinting, criminal background checks, etc.
Q. Can I make deductions for uniforms or uniform maintenance?
A. In most cases no deductions can be made. However, such deductions are permitted if the payments are authorized by the employees and their collective bargaining agents for rental of work clothing or uniforms or for dry cleaning and laundering of the clothing or uniforms.
An employee can be required to wear a uniform and if the employee pays for uniforms in cash and the cash payment brings the employee below the minimum wage, the employer is required to make up the difference for the minimum wage for that week.
In addition, an employer may not require an employee to purchase a uniform that contains a company logo or cannot be worn as street wear.
Q. Can I make deductions or require an employee to pay for a license, certificate, or certification that is required in order for the employee to perform the job?
A. No payroll deductions can be made for a license, certificate or certification that is required to do the job. The employee can be required to pay for the license, certificate, or certification if it is the property of the employee, not exclusive to one employer, and is required to perform the job. However, payment cannot be made by payroll deduction.
Q. How often must an employee be paid?
A. In most cases employers are required to issue payment at least twice a month on regular paydays established by the employer. However, for certain executive, supervisory, or other special classes of workers, payment can be made once a month as long as there is a regularly established schedule.
Q. Can my employees have their paychecks deposited directly into a bank account?
A. Yes, if you as the employer choose to provide this option. You are required to make arrangements with a financial institution. The individual employee must consent to direct deposit. You may offer the option even if not all of the employees choose not to participate. The option of direct deposit may not result in the employee incurring any additional fees as the immediate result of using direct deposit.
Q. Can I pay employees with a payroll debit card?
A. Yes, if you ensure that the following conditions are met (refer to N.J.A.C. 12:55-2.4 for the complete list of conditions):
- You must explain to the employee how the payroll debit card may be used at least one time per pay period to withdraw wages in full, without any fee and without difficulty.
- You must disclose the features of the payroll debit card (for example, withdrawal at any ATM or point-of-sale use), including any fee(s), which may be charged to the employee.
- The individual employee must consent in writing to being paid with a payroll debit card.
- You cannot intimidate or threaten an employee with discharge for refusal to accept a payroll debit card.
- You cannot make a payroll debit card a condition of hire or continued employment.
- You must furnish the employee with a statement of deductions for each pay period.
Q. Am I required to provide fringe benefits such as vacation, severance, holiday pay, etc.?
A. No. Fringe benefits like vacation, severance, holiday, or any other type of benefit pay are not required by New Jersey State law. If the employer chooses to provide these benefits, they must be administered uniformly in accordance with the established policy or employment agreement. An individual may have a basis for a complaint if the employer fails to adhere to the policy or agreement.
However, under New Jersey's Earned Sick Leave, most employees have a right to accrue sick leave at the rate of 1 hour for every 30 hours worked, up to a maximum of 40 hours of leave per benefit year. The law took effect on October 29, 2018.
Q. Am I required to provide health insurance coverage?
A. Please be advised that there is no New Jersey law concerning the requirement for health insurance coverage. The Patient Protection and Affordable Care Act, administered by the federal government, may require employers to offer health insurance coverage. Information on the Act may be found at www.healthcare.gov.
Q. Am I allowed to discontinue providing medical benefits?
A. Yes. An employer may discontinue providing medical benefits; however, the employer is required to give notice if the medical benefits are being discontinued or if the medical benefits are changing. If the medical benefits are being discontinued, the employer must provide 30 days notice in advance, in writing. If the medical benefit plan is changing the employer must notify the employees in writing immediately as soon as the employer is notified by the health insurer. You may also be required to provide COBRA benefits. Information about COBRA is available on the United States Department of Labor web site: https://www.dol.gov/agencies/ebsa/workers-and-families/changing-jobs-and-job-loss.
Q. Are employers required to pay sick leave benefits?
A. Yes. Under New Jersey's Earned Sick Leave, most employees have a right to accrue sick leave at the rate of 1 hour for every 30 hours worked, up to a maximum of 40 hours of leave per benefit year. The law took effect on October 29, 2018.
Q. Are my employees eligible for Family and Medical Leave?
A. Temporary Disability and Family Leave Insurance provides cash benefits when employee have to stop working to:
- Care for their own or a loved one’s physical or mental health (including COVID-19)
- Care for themself due to pregnancy and childbirth recovery
- Bond with a new child
- Cope with domestic or sexual violence.
Most NJ workers are covered and their job may be protected under federal and/or state law.
Q. Can I require a prospective employee to take a pre-employment lie detector test?
A. No, except in the following circumstances:
- The employer is authorized to manufacture, distribute, or dispense controlled dangerous substances
- The employee or prospective employee is or will be directly involved in the manufacture, or dispensing of, or has or will have access to, legally distributed controlled dangerous substances
- The test, which shall cover a period of time no greater than 5 years preceding the test, shall be limited to the work of the employee or prospective employee and the individual's improper handling, use, or illegal sale of legally distributed controlled dangerous substances
Q. Can I require an employee to pay for a lie detector test?
Q. Can I require prospective employees to take other types of pre-employment testing such as drug testing, medical examinations, vision exams, etc.?
A. Yes, but unless you are hiring security guards, you cannot deduct the cost for this from the employee's pay or require the employee or prospective employee to pay for the cost of such drug testing, medical examinations, visual exams, etc. The 2004 Security Officer Registration Act (N.J.S.A. 45:19A-1 et seq.) allows applicants for security guard jobs to be responsible for the payment of any registration costs with the State Police, which includes drug testing, fingerprinting, criminal background checks, etc.
Q. At what age does a minor need an employment certificate?
A. An employment certificate (also referred to as "working papers") is required for all minors under the age of 18.
Q. What is the procedure for obtaining the employment certificate?
A. After receiving a promise of employment from an employer, the minor may obtain a blank A300 employment certification form online or from the issuing officer of the local school district where the minor resides. If the minor is not a New Jersey resident, the paper can be obtained from the district in which the minor has obtained a promise of employment. For more information, click here.
Q. Does a minor need a new employment certificate every time there is a job change?
A. Yes, a working paper is only valid for the employment stated on the certificate.
Q. What kind of work can a minor perform?
A. The type of work and hours of work vary depending upon the age of the minor. For more information click here.
Q. Can the Division of Wage and Hour help people who feel they were unfairly terminated or discharged?
A. Wage and Hour Compliance has jurisdiction in termination cases only when the termination results from a wage complaint. Terminating an employee for making a complaint is a violation of the law and will result in fines as well as a disorderly persons offense. It may also result in other legal action being taken against you.
If the employment was terminated for any other reason, staff in Wage and Hour Compliance cannot provide assistance. New Jersey is an "employment-at-will" state, meaning that either an employer or employee may end employment at any time, without reason or notice.
If the individual believes employment was terminated for reasons that constitute discrimination, they must call the Division on Civil Rights at (609) 292-4605 or visit their website at www.nj.gov/oag/dcr.
Q. Do I have to give notice when I am terminating or discharging an employee? Must an employee give notice of their intention to quit?
A. No. Notice is not required by either party based on the fact that New Jersey is an "employment at will" state, meaning that an employer or employee may terminate the relationship at any time, without a reason, without cause.
Q. When do I have to pay final wages to a terminated employee?
A. You may wait until the next regular payday designated for the pay period regardless of whether the employee quit or was fired.
Q. Do I have the right to change an employee's hours of work?
A. The employer has full discretion in scheduling of hours and days of work for the employees. However, if the hours of work are reduced, the employee may be eligible for unemployment insurance benefits for which the employer will be charged.
Q. Am I required to give employees breaks or lunches?
A. The mandatory break law only applies to minors under the age of 18. Minors must be given a thirty (30) minute meal period after five (5) consecutive hours of work. Company policy dictates break and lunch periods for anyone over the age of 18.
Q. Am I required to allow time off for jury duty and to pay for the time off?
A. You are required to allow employees time off to attend court for jury duty. However, there is no requirement for the employer to compensate the employee for the time.
Q. Are employers required to pay employees when they are unable to work due to a declared state of emergency?
A. No. New Jersey State law does not require employers to pay employees for time not actually worked. (Exception: Salaried employees who are exempt from overtime.)
Employees who were unable to work due to a weather-related emergency or other disaster may be eligible for unemployment benefits. The fastest way to file for Unemployment Insurance benefits is through https://myunemployment.nj.gov/.
People may also file an unemployment claim by telephone by contacting the state Department of Labor's Re-employment Call Centers at:
- North Jersey (201) 601-4100
- Central Jersey (732) 761-2020
- South Jersey (856) 507-2340
- Out of State (888) 795-6672
If a federal disaster is declared, please call the FEMA emergency number at 1-800-621-FEMA (3362), or 1-800-462-7585 (TTY) for the hearing and speech impaired. Information is also available via the internet at www.disasterassistance.gov and www.fema.gov.
Q. Is an employer required to pay a salaried employee who is exempt from overtime for days the business was closed due to a weather-related emergency or disaster?
A. Yes. If the employer closes operations due to a weather-related emergency or other disaster for less than a full workweek, then the employer must pay an exempt employee "the full salary for any week in which the employee performs any work without regard to the number of days or hours worked," because "deductions may not be made for time when work is not available."
Q. Can employers force employees to take a vacation day(s) for the day(s) the business was closed due to a weather-related emergency?
A. Yes. If an employer chooses to provide benefits, it is up to the employer how they will be administered. However, benefits must be administered uniformly in accordance with the established policy, employment agreement, or union contract. An individual may have a basis for a wage complaint if the employer fails to adhere to the policy, agreement, or contract.
Q. I am an employer who had to close my business for several days due to a weather-related emergency or other disaster. I cannot afford to pay my employees during the time I am closed. However, I now want to give my hourly employees extra hours (over 40) to make up the time. Will I have to pay overtime?
A. Yes. You must pay overtime after 40 hours of actual work in a 7-day workweek, with the exception of certain salaried employees who meet the definition of an executive, administrative, or professional.