Labor & Employment Insights — Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events

New Jersey’s Pay Transparency Act Becomes Effective June 1st, 2025

Published on: May 15, 2025 | by Lisa Gingeleskie

On June 1st, 2025, New Jersey’s Pay Transparency Act (the “Act”) goes into effect, requiring New Jersey employers to identify certain wage or salary information in both internal and external job postings. The Act is another effort in a series of steps taken by the state of New Jersey to promote pay equity.

Posting Requirements

The Act applies to employers, with ten (10) or more employees over twenty (20) calendar weeks, who conduct business or accept applications for employment in the state of New Jersey. To meet this threshold, the Act does not specify whether the employer must have ten (10) or more employees who actually work in the state or whether employers must also count remote employees. Since the Act is silent on this point, we recommend that employers with ten (10) or more total employees prepare for compliance.

The Supreme Court Establishes Plaintiff-Friendly Pleading Standards Regarding ERISA Prohibited Transaction Claims

Published on: May 12, 2025 | by James K. Estabrook, Elizabeth Engert Manzo and Lisa Gingeleskie

On April 17th, 2025, the United States Supreme Court issued a unanimous opinion in Cunningham v. Cornell University establishing a plaintiff-friendly pleading standard applicable to prohibited transaction claims under the Employee Retirement Income Security Act (“ERISA”). The Court’s holding makes it significantly easier for plaintiffs to defeat early-stage motions to dismiss, engage in costly discovery, and extract a settlement as to an alleged prohibited transaction claim.

Background

ERISA bars certain prohibited transactions between a plan and a related party, i.e. a “party-in-interest,” to prevent conflicts of interest. However, there are several exemptions that allow plans to interact or conduct business with a party-in-interest if specific requirements are met. In Cunningham, the plaintiffs accused Cornell’s retirement plans of engaging in prohibited transactions by paying excessive fees for recordkeeping and other administrative services. The University responded that these transactions were exempt under ERISA Section 408(b)(2), which allows certain transactions with parties-in-interest if the following three (3) requirements are met: 1) the service is necessary for the establishment and operation of the plan, 2) such service is furnished under a reasonable contract or arrangement, and 3) compensation paid for the service is reasonable. The district court dismissed the participants’ transaction claims, and the Second Circuit affirmed the dismissal, ruling that the plaintiffs must plead and prove the absence of such exemptions in order to state a claim under ERISA Section 406(a)(1)(C).

The New Jersey Supreme Court Rules: Commissions are Wages

Published on: March 21, 2025 | by Lisa Gingeleskie

On March 17, 2025, the New Jersey Supreme Court issued a unanimous decision finding that commissions are wages under the New Jersey Wage Payment Law (“WPL”) because they are “direct monetary compensation for labor or services rendered by an employee.” There are no exceptions – compensating an employee by paying a commission for a labor or service always constitutes a wage under the law.

The Underlying Dispute

Plaintiff, Rosalyn Musker (“Musker”), worked as a sales manager for the Defendant company, Sukhi, Inc. (“Suuchi”), which provided a proprietary software platform for apparel manufacturers and primarily generated revenue from subscriptions to its services. Musker earned a base salary of $80,000 and was entitled to receive commissions based on different tiers of sales that she reached in accordance with Suuchi’s Sales Commission Plan (the “SCP”), which included language intended to “cover all sales situations.”

The New Jersey Data Protection Act is in Effect

Published on: February 24, 2025 | by Lisa Gingeleskie

On January 16, 2025, New Jersey’s Data Protection Act (“NJDPA” or the “Act”) went into effect, making New Jersey the nineteenth state to adopt a comprehensive data privacy law. The opportunity to cure any defects under the law will sunset on July 1, 2026. Therefore, it is critical that covered entities, or “controllers” of personal data, act now to ensure compliance with the law’s requirements as outlined more fully in this article.

To Whom Does the Law Apply?

The NJDPA applies to companies that:

New Jersey Employment Law: What to Expect in 2025

Published on: February 13, 2025 | by Lisa Gingeleskie

As we are already a few weeks into the new year, now is a good time for employers to review their employee handbooks and policies to ensure compliance with the following changes in New Jersey employment law or best practices.

The Pay Transparency Act

Effective June 1, 2025, New Jersey employers with ten (10) or more employees over twenty (20) calendar weeks doing business or taking applications for employment in the State of New Jersey must disclose “the hourly wage or salary, or a range of the hourly wage or salary, and a listing of benefits and other compensation programs for which the employee would be eligible within the employee’s first 12 months of employment.” Notably, this requirement does not prohibit an employer from increasing the wages, benefits, and compensation identified in the job posting at the time of making an offer for employment to an applicant.

Social Media in the Hiring Process: Pitfalls and Protections

Published on: December 20, 2024 | by Lisa Gingeleskie

Employers commonly utilize social media to gather information about prospective employees as part of the hiring process. Although social media can be very useful for this purpose, the law on what is permissible use by an employer is underdeveloped. While we wait for the law to catch up to technology, it is imperative that employers are advised as to the existence of certain legal pitfalls when using social media in the hiring process, as well as those practices they can implement to help avoid future liability.

Targeted Advertising

Federal, state and local anti-discrimination laws prohibit discrimination in hiring based on a prospective employee’s protected class. Employers can unwittingly run afoul of these laws, however, when they use social media to recruit or research prospective employees. For example, more and more employers are using targeted advertising to recruit employees. This form of advertising allows employers to use social media platforms, like Facebook, to select a targeted audience based on a range of factors, including age, race and interest. Using the extensive data it collects from its members, social media sites are then able to specifically isolate the employer’s advertisement so that it is shown only to those recipients that fall within the employer’s chosen audience.

To Be Exempt or Not Exempt; That is the Question

Published on: December 20, 2024 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

When hiring, many employers do not give proper consideration to whether newly hired employees should be classified as “exempt” employees who by law are not entitled to overtime pay for hours worked in excess of 40 hours in any workweek, or “nonexempt” employees who are entitled to overtime pay. A failure to properly apply the legal criteria for employee classification can be a costly oversight for employers.

The federal Fair Labor Standards Act (FLSA) mandates that employees be paid on an hourly basis of at least the federal minimum wage, currently $7.25. States and municipalities are free to enact higher minimum wage rates. New Jersey recently passed legislation that will progressively increase the current $8.85 per hour minimum wage to $15.00.

The FLSA further mandates that employees be paid at an overtime rate of not less than 1.5 times the employee’s regular rate for each hour of work time in excess of 40 hours in any one workweek, unless the employee qualifies for one of the exemptions from these overtime requirements set forth in the statute. So how does an employer determine the proper classification of an employee as either nonexempt or exempt? Unfortunately, there are no bright-line rules an employer can rely upon in making these determinations, and the employee’s job responsibilities and the employer’s control over the employee largely dictate the proper classification under the FLSA.

What Employers Need to Know About Employee Privacy

Published on: December 18, 2024 | by Lisa Gingeleskie

In an age where anyone can look up almost anyone or anything online, the term “privacy” can be difficult to define. The meaning of the word becomes even more challenging when viewing privacy in the context of the workplace. Many employers struggle with not only identifying what is private protectable information, but also how to safeguard that information while also protecting the company’s own business interests. A rise in remote or hybrid work situations has added another layer of complexity to this challenge. Given the increased costs of litigation, it is critical that employers understand their obligations under the law and how to strike a legally compliant balance between these competing interests.

Employee Records

Neither federal nor New Jersey law specifically regulates an employer’s maintenance and handling of employee personnel records, although there are certain statutes that contain ancillary record-keeping provisions. For example, New Jersey’s Paid Sick Leave Law requires that employers maintain records of hours accrued, used, and carried over by employees for a five year period. Also, employee medical records are afforded separate and greater legal protections pursuant to various federal and state laws.

Avoiding Misclassification of New Jersey Workers

Published on: December 17, 2024 | by Joshua L. Weiner

When determining whether to classify a worker as an employee or an independent contractor, employers in New Jersey must follow the “ABC” test. Under this test, an individual receiving remuneration in return for rendering services is presumed to be an employee unless the employer can meet its burden of proving all three of the following elements:

The individual has been and will continue to be free from control or direction over the performance of work performed, both under contract of service and in fact.
The work is either outside the usual course of the business for which such service is performed, or the work is performed outside of all the places of business of the enterprise for which such service is performed.

Wrongful Discharge Suit Against Walmart for Failure to Hire Recreational Cannabis User Goes Up in Smoke

Published on: December 16, 2024 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

In a case of first impression, a split judicial panel of the Third Circuit Court of Appeals concluded that New Jersey job seekers do not have the right to sue employers who rescind job offers to applicants testing positive for cannabis, despite state legislation that bars employers from doing just that.

Background

The case was brought under New Jersey’s 2021 Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) that legalized recreational marijuana use. In pertinent part, CREAMMA expressly prohibits employers from refusing to hire applicants because of their use or non-use of marijuana. Less than a year after CREAMMA’s passage, Erik Zanetich was offered a job at Walmart, subject to passing a drug test. Walmart’s policy mandated that applicants were ineligible for employment if they tested positive for drugs. When Zanetich tested positive for cannabis, his job offer was rescinded. Zanetich filed a class action suit, arguing that Walmart’s retraction of his job offer was in violation of the protections accorded to marijuana users under CREAMMA.