New Jersey Employers Get Brief Reprieve on Older Claims Brought Under Wage Theft Act
KEY TAKEAWAYS:
-
For claims that accrued prior to August 6, 2019, the applicable statute of limitations under the Wage Theft Act remains two years.
-
For claims that accrued on or after August 6, 2019, the applicable statute of limitations under the Wage Theft Act is extended to six years.
-
Goldberg Segalla’s Employment and Labor attorneys stand ready to assist employers in ensuring the provisions of their employment contracts are in compliance with all applicable federal, state, and local laws.
On August 6, 2019, the Wage Theft Act (L. 2019, c. 212) went into effect in the State of New Jersey. The act amended the Wage Payment Law (WPL) and the Wage and Hour Law (WHL) and strengthened the wage and hour protections for employees across the state.
Critically, the Wage Theft Act added liquidated damages and a retaliation claim to both the WPL and the WHL, added attorneys’ fees to the WPL, and extended the applicable statute of limitations under the WHL from two years to six years.
After its enactment, the question remained whether the Wage Theft Act applied retroactively, and specifically, whether it extended the statute of limitations to causes of action that accrued prior to August 6, 2019.
Recently, in answering that very question, the Appellate Division held that it did apply retroactively. See Christopher Maia v. IEW Construction Group, 475 N.J. Super. 44, 48 & 58 (App. Div. 2023). However, last week, on May 15, the New Jersey Supreme Court overturned the Appellate Division’s decision. See Christopher Maia v. IEW Construction Group, (A-3-23) (088010) (May 15, 2024).
In a unanimous decision, the New Jersey Supreme Court found the Wage Theft Act did not apply retroactively. The court discussed that New Jersey courts have long followed a general rule of statutory construction that favors a prospective (and not retroactive) application of statutes. The Wage Theft Act specifically includes the language, “shall take effect immediately,” which the court explained further supports the statutory construction favoring prospective application.
The court explained that the Wage Theft Act allows plaintiffs to bring new claims with enhanced damages that were not previously available to plaintiffs at the time their injuries occurred, thereby changing the legal consequences of acts. The court noted that the changes are not merely procedural; rather, they affect the duties and liabilities involved and attach new legal consequences to events. Applying the provisions to conduct that was “completed before its enactment” would therefore be retroactive application.
For a statute to apply retroactively, both parts of a two-part test must be satisfied: first, did the Legislature intend to give the statute retroactive application; and second, will retroactive application of the statute result in an “unconstitutional interference with vested rights” or a “manifest injustice.” The court ruled that the first part failed as the Legislature did not intend for the statute to apply retroactively, and therefore, the analysis ended there and the court held that it would not be appropriate to apply the Wage Theft Act retroactively.
The ruling sends the Maia v. IEW Construction Group case back to the trial court to proceed on a prospective application of the statute.
For practical application, this recent ruling means that a potential plaintiff’s wage claim that accrued prior to August 6, 2019, is time-barred by the applicable two-year statute of limitations, instead of still having more than a year left had the new six-year statute of limitations be found to apply retroactively to such a claim.
Goldberg Segalla’s Employment and Labor attorneys are readily situated to assist employers in ensuring that the provisions of their employment contracts are in compliance with all applicable federal, state, and local laws.
- Cali L. Chandiramani
- Scott R. Green
- Caroline J. Berdzik
- Or another member of the Employment and Labor practice group.