Wage & Hour Law

Court Addresses When Commissions are Covered by Wage Payment Law

July 1, 2024 | by Jonathan I. Nirenberg

The New Jersey Wage Payment Law (“WPL”) is an important employment law that requires employers to pay employees their wages on time. Since August 2019, the WPL has entitled employees whose employers fail to pay them on time to recover not only their unpaid wages, but also up to 200% of that amount as liquidated damages plus their attorney’s fees.

One question that has been coming up with increasing frequency is when commissions are wages that are subject to the WPL, and thus when unpaid commissions (and belatedly paid commissions) are subject to the liquidated damages and attorney’s fee provisions.

The WPL defines wages to include at least some commissions, as follows:

Overtime Exemptions Only Apply to Salaried Employees

March 1, 2023 | by Jonathan I. Nirenberg

Last week, the United States Supreme Court ruled that, no matter how much an employee earns per year, the primary exemptions to federal overtime pay requirement do not apply unless the employee is guaranteed to receive at least $455 per week for any week in which he or she performed any work for the employer.

Michael Hewitt worked for Helix Energy Solutions Group as a “toolpusher” on an offshore rig. Helix paid him a flat fee for each day he worked. Mr. Hewitt worked for Helix for four consecutive weeks, typically 12 hours per day for seven days per week, followed by four weeks off. Although Helix did not pay him for the four week periods when he was not working, Mr. Hewitt earned over $200,000 per year. Even though Mr. Hewitt regularly worked more than 40 hours per week, Helix never paid him an overtime premium.

Mr. Hewitt sued Helix under the Fair Labor Standards Act of 1938 (“FLSA”), a federal law that requires employers to pay covered employees receive overtime pay if they work more than 40 hours per week.

Is it a Bonus or is it a Tip: When Must Payments from Third Parties be Counted When Calculating Overtime Pay?

September 10, 2019 | by Jonathan I. Nirenberg

The Third Circuit recently addressed when a bonus an employee receives from someone other than his or her employer counts toward the employee’s “regular hourly rate” of pay under the Fair Labor Standards Act (“FLSA”).

The FLSA is a federal law that, among other things, requires employers to pay most non-exempt employees time-and-a-half when they work more than 40 hours in a workweek. As a result, the higher the employee’s regular hourly rate, the higher the overtime pay premium the employee is entitled to receive.

The case involves employees of Bristol Excavating Inc., an excavation contractor, who work at sites owned by another company, Talisman Energy Inc. Since the employees work 12 ½ hour shifts every day for two straight weeks, followed by a week off, they routinely work substantial overtime hours.

New Jersey Enacts Powerful New Wage & Hour Law Protections

August 6, 2019 | by Jonathan I. Nirenberg

Today, New Jersey’s Acting Governor Sheila Oliver signed an amendment to New Jersey’s wage and hour laws that makes several extremely important improvements.

The amendment impacts several New Jersey laws, most importantly the Wage & Hour Law (“WHL”) and the Wage Payment Act (“WPA”). The WHL is a statute that requires employers to pay employees who do not fall within an exemption minimum wage ($10 per hour in 2019) and time-and-half when they work more than 40 hours in any particular workweek. The WPA is a law that requires employers to pay employees on time, and typically at least twice per month.

The amendment includes numerous new provisions, all of which go into effect immediately. We have summarized some of the most significant changes below:

Hourly Employees Must be Paid for Short Breaks

January 12, 2018 | by Jonathan I. Nirenberg

The Third Circuit Court of Appeals recently ruled that the Fair Labor Standards Act (“FLSA”) requires employers to pay employees for breaks during the workday that are no longer than 20 minutes long.

American Future Systems, which does business as Progressive Business Publications, publishes and sells business publications. Progressive pays its sales representatives by the hour, plus bonuses based on how much they sell, for the time they are logged onto their work computers. Most of Progressive’s employees are paid minimum wage.

In the past, Progressive allowed its employees to take two paid fifteen-minute breaks per day. But in 2009, the company implemented what it called a “flex time” policy. Under this policy, employees were permitted to log off of their computers whenever they wanted, for as long as they wanted, as long as they worked the agreed-upon total number of hours per week. But under this new policy, Progressive did not pay employees if they logged off of their computers for more than 90 seconds. In other words, it stopped paying them for breaks that lasted more than 90 seconds.

Exotic Dancer Can Bring Overtime Claim in Court Despite Arbitration Agreement

September 14, 2017 | by Jonathan I. Nirenberg

In a recent ruling, the Third Circuit Court of Appeals concluded that an arbitration agreement did not prohibit an exotic dancer from pursuing her overtime and minimum wage claims in court.

Alissa Moon worked at the Breathless Men’s Club, which is in Rahway, New Jersey. The Club treated her as an independent contractor, rather than an employee. In fact, she had to agree to rent space from the Club where she could perform, and signed an “Independent Dancer Rental Agreement” which expressly states that she is an independent contractor.

That agreement also includes the following arbitration provision:

New Jersey and New York Raise Minimum Wage

January 4, 2017 | by Jonathan I. Nirenberg

Starting on January 1, 2017, the minimum wage has increased in New York State, New York City and New Jersey. Specifically:

New Jersey

The minimum wage has increased from $8.38 to $8.44 per hour as a cost of living increase. Under New Jersey law, there will be additional cost of living increases in future years.

Employer Cannot Offset Unpaid Work with Voluntary Pay During Meals

October 31, 2016 | by Jonathan I. Nirenberg

A recent ruling from the United Stated Third Circuit Court of Appeals in a wage and hour lawsuit holds that an employer cannot use the fact that it voluntarily paid its employees during their lunch to offset periods when employees worked but were not paid. The Third Circuit is the federal appellate court that handles cases from several districts, including the District of New Jersey.

The case was brought by Bobbi-Jo Smiley, Amber Blow, and Kelsey Turner, three former employees of E.I. Dupont De Nemours & Co. and Adecco USA, Inc. (collectively, “DuPont”), as a potential class and collective action. They claimed DuPont failed to pay them overtime for a total of approximately 30 to 60 minutes per day for time they spent (1) “donning and doffing,” meaning putting on and taking off their uniforms and protective gear, and (2) “shift relief,” meaning updating the employees who would be relieving them on the next shift. Since the employees routinely worked more than 40 hours per week, they claimed they were entitled to time-and-a-half for these additional pre-shift and post-shift overtime hours.

The workers sued under the Fair Labor Standards Act (“FLSA”) and a similar state wage and hour law. After 160 workers joined the lawsuit, DuPont filed a motion for summary judgment seeking to have the case dismissed. The company argued that because it had voluntarily paid the workers during their lunch and other meal breaks – something it was not legally required – those payments should offset any additional overtime pay which the employees might be entitled to receive. The trial court agreed and dismissed the case since the paid meal breaks were longer than the unpaid donning and doffing and shift relief time. The employees appealed.

Independent Sales Representatives May Be Entitled to Quadruple Damages

April 27, 2016 | by Jonathan I. Nirenberg

A less-known New Jersey statute provides protection to independent commissioned salespeople after their contracts terminate. That law, the New Jersey Sales Representatives’ Rights Act, entitles independent contractors who work as sales representatives to be paid all commissions and any other compensation they earned within 30 days after their contracts terminated or 30 days after their commissions were due, whichever is later. This requirement applies irrespective of the reason why the contract terminated, including if the sales representative resigned, was terminated without cause, or was terminated with cause.

The statute, which originally was passed in 1990, defines a “sales representative” to be “an independent sales company or other person” who is compensated at least in part by commissions. It makes it clear its protection applies only to independent contractors, and does not apply to employees.

The statute further indicates that sales representatives also are entitled to receive commissions on goods that were ordered on or before the last day of the salesperson’s contract, even if the principal (meaning the business or individual who they worked for) did not accept, receive or pay for the goods until after the salesperson’s contract terminated. The principal must pay the salesperson for any such post-termination commissions within 30 days after the payment would have been due under the contract if it had remained in effect.

Court Approval Needed to Dismiss Overtime Lawsuit

August 24, 2015 | by Jonathan I. Nirenberg

The Second Circuit Court of Appeals recently ruled that the parties to a lawsuit cannot agree to dismiss a case under the Fair Labor Standards Act (“FLSA”) as part of a settlement unless they have the approval of a Judge or the United States Department of Labor (“DOL”). The FLSA is a federal wage and hour law which establishes minimum wage and overtime requires.

Dorian Cheeks worked as a server for Freeport Pancake House, Inc. and W.P.S. Industries, Inc. He filed a lawsuit in the Eastern District of New York against both companies in which he asserted claims under the FLSA and New York Labor Law. He is seeking unpaid overtime pay and liquidated (double) damages, as well as attorneys’ fees. He also alleges that the Pancake House demoted him and eventually fired him because he objected about the company’s failure to properly pay overtime to him and its other employees, and is seeking damages for his past and future lost wages.

Mr. Cheeks and the Pancake House eventually agreed to settle the case. Accordingly, they filed a stipulation with the court seeking to have the case dismissed with prejudice. However, the court refused to dismiss the case. Instead, it directed the parties to file a copy of their settlement agreement as part of the public record, and to explain why they believe the settlement is “fair and reasonable.” The Court did so because the FLSA prohibits employees from waiving their rights under it unless their settlement agreement either was supervised by the DOL or approved by a court.