In most of the country, businesses can pay their tipped workers—such as servers and bartenders—only $2.13 per hour, so long as the tips the workers make raise their hourly rate to at least $7.25, the federal minimum wage. This is called “tipped minimum wage,” where the employer pays only $2.13 per hour, and uses the employee’s tips as a “tip credit” which makes up the difference. If the worker’s tips don’t make up the difference, the employer is required to pay it.

Some cities and states have higher minimum wages, but still allow employers to take a tip credit. For example, New Jersey’s state minimum wage is $8.60 per hour, and New York State’s minimum wage ranges from $10.40 to $13.00 per hour, depending on where you live within the state. Both states allow employers to take a tip credit. In New York City, the tipped minimum wage for businesses with 11 or more workers is $8.65, and the minimum wage for non-tipped workers is $13.00.

In contrast, some states do not allow employers to take a tip credit. Alaska, California, Washington, Oregon, Nevada, Montana, and Minnesota require all workers, tipped or not, to receive the same minimum wage.

Tipped workers are especially vulnerable to wage theft and harassment, because their bosses can illegally withhold or pocket tips from workers who, for example, don’t accept sexual advances, threaten to report harassment, don’t know that their bosses are not allowed to take a portion of their tips, or simply because the bosses secretly take a portion of the tips and the workers are unaware.

Further, because tips make up such a large proportion of of these workers’ income, it can be hard for them to anticipate their monthly income, leave them subject to harassment from customers, and to lose tip income from customers tip less–or not at all–due to racial, religious, gender, or sexual orientation bias against the employee.

New York Governor Andrew Cuomo is now considering whether to eliminate this problem for workers in New York State by raising the minimum wage for tipped workers to the same level as all other workers, and has scheduled public hearings around the state to for input on whether minimum wage tip credits should be ended in New York.

Those in the restaurant and other tipped industries argue eliminating the tip credit would harm small businesses, force employers to cut jobs, and decrease workers’ income because customers would tip less. Although, according to the Economic Policy Institute, workers in states that have eliminated the tipped minimum wage earn more money and are less likely to fall below the poverty line than those in states which allow the tipped minimum wage.

We will continue to monitor this as it develops.

On January 16, 2018, Governor Phil Murphy’s first official act as Governor was to sign Executive Order No. 1, promoting equal pay for women. The Order bars managers in state government from asking job applicants about their salary history, because “asking job applicants about their salary histories inappropriately perpetuates the wage gap by allowing prospective employers to offer lower salaries to women than they otherwise would . . .”

The Order states that “studies have demonstrated that women in New Jersey who hold full-time, year-round jobs are paid 82 cents for every dollar paid to men holding full-time, year-round jobs,” that this pay gap “has been demonstrated to exist across all industries and among workers with all levels of education,” and that the gap is even larger for Black and Latina women.

Governor Murphy said that he “would make it state law” if the New Jersey legislature sent a bill to his desk that extended these provisions to private employers. State lawmakers, including Senate Majority Leader Loretta Weinberg (D-Bergen), Assembly Speaker Craig Couglin (D-Middlesex), and Senate President Stephen Sweeney (D-Gloucester) joined Murphy for the signing to support equal pay in New Jersey.

“The reality is it is something that women face each and every day,” said Coughlin. “It’s painfully unfair and it’s something that we have to change. When you ask for someone’s salary you perpetuate the problem.”

On December 20, 2017, then-Governor Chris Christie signed into law Senate Bill 3306, enacting new protections for job seekers who have a criminal record. The law, effective immediately, is intended to give ex-offenders a chance to speak personally with interviewers and tell their own story, rather than being disqualified for their criminal history before even meeting a potential employer.

The original ban-the-box law went into effect in 2015, and prohibits employers with 15 or more employees from posting job ads stating that they will not hire anyone arrested or convicted of a crime, and from inquiring about an applicant’s criminal history until after the applicant’s first interview.

The new protections in the expanded ban-the-box law prohibit covered employers from:

• Requiring applicants to fill out an application that includes questions about the applicant’s expunged criminal history.
• Asking written or oral questions, or doing online searches seeking information about the applicant’s expunged criminal history before the completion of the applicant’s first interview.
• Refusing to hire an applicant because they have an expunged criminal record, or a criminal record erased due to an executive pardon.

Two companion bills, Senate Bill 3307 and 3308, were enacted on the same day. These bills shorten the time an ex-offender has to wait to have their record expunged, raise the number of convictions that can be expunged, and reduce the amount of time a juvenile ex-offender has to wait to seek to expunge their records.

On January 8, 2017, Governor Chris Christie signed into law a package of new protections for workers who breastfeed on the job. The law, which amends the New Jersey Law Against Discrimination (LAD), prohibits employers from firing or discriminating against employees for breastfeeding or expressing milk during the workday.

The new law is in effect now, and it provides the following:

• Employers are required to provide reasonable break time for breastfeeding employees to breastfeed an infant child or to express milk.
• Employers are required to provide a suitable location, other than a bathroom stall, for employees to breastfeed or express milk. This location must be near the employee’s work area.
• Employers are required to accommodate breastfeeding employees unless the employer can show that the accommodation would be an undue hardship for the business.

The breastfeeding protections under the LAD apply to employees regardless of their exempt or non-exempt status under the federal Fair Labor Standards Act (FLSA). This means the law applies to you whether you are a salaried or hourly employee. There is no time limit on the LAD breastfeeding protections, in contrast to breastfeeding protections under the FLSA, which only last up to one year after birth.

Sexual harassment is everywhere in the news right now. From Harvey Weinstein to Al Franken to Louis C.K. to Matt Lauer, it seems like every day there are new revelations of sexual harassment in the workplace.

So, what exactly is sexual harassment under the law?

Workplace sexual harassment affects women in every profession and across every demographic. But anyone, male or female, can be a victim of sexual harassment, and a harasser can be a woman or a man, or they can be the same sex. A man might harass another man, a woman might harass another woman.

Federal law considers sexual harassment a form of sex discrimination, which violates Title VII of the Civil Rights Act of 1964 when it occurs in the workplace. There are also state laws that prohibit sexual harassment, including the New Jersey Law Against Discrimination (“LAD”). The LAD prohibits employment discrimination against any person on the basis of the LAD’s protected categories, which include sex, sexual orientation, and gender identity.

Guidelines published by the federal Equal Employment Opportunity Commission (“EEOC”) define sexual harassment as unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when:

• Submission to such conduct is a term or condition of employment, whether stated outright or implied.
• Submission to or rejection of the conduct is a basis for employment decisions, like promotion, hiring, firing, or getting a raise.
• Conduct of a sexual nature has the purpose or effect of unreasonably interfering with work performance.
• Conduct of a sexual nature creates an intimidating, hostile, or offensive working environment.

Unwelcome is the critical word, and it means the sexual conduct must be unwanted. Sexual conduct is unwelcome whenever the person subjected to it considers it unwelcome.

The kinds of behavior that constitute sexual harassment can vary depending on the situation and people involved. Sexual harassment might include unwelcome sexual advances or requests for sexual favors. Direct or indirect threats or bribes in exchange for sexual activity may be sexual harassment. Sexual innuendos and comments, or sexually suggestive jokes may be sexual harassment in some contexts. Unwelcome touching or brushing against a person, or displays of explicit material may be sexual harassment. Finally, attempted or completed sexual assault is sexual harassment.

There are generally two types of sexual harassment, “quid pro quo” and “hostile work environment.”

Quid pro quo sexual harassment occurs when employment decisions – like promotions, assignments, or keeping your job – are based on your willingness to submit to the sexual harassment. Unwelcome sexual advances, requests for sexual favors, or other conduct of a sexual nature is quid pro quo sexual harassment when:

• submission to such sexual conduct is  explicitly or implicitly a term or condition of employment, or
• submission or rejection of the sexual conduct is the basis for employment decisions.

A hostile work environment occurs when sexual harassment makes your workplace environment intimidating, hostile, or offensive. Unwelcome sexual advances, requests for sexual favors, and other verbal sexual conduct is hostile environment sexual harassment when:

• the conduct has the purpose or effect of unreasonably interfering with an employee’s work performance, or
• the conduct creates an intimidating, hostile, or offensive working environment.

The harasser can be the victim’s supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.  In fact, a victim of sexual harassment does not necessarily have to be the person directly being harassed; the victim could be an employee who is indirectly but negatively affected by the offensive conduct.

If you have been sexually harassed in your workplace, call us for a free, confidential consultation at 732-325-0318.

Employers must pay employees for breaks that last 20 minutes or less, even when they are logged off their computers and not doing any work, according to a new decision by the Third Circuit Court of Appeals in Secretary, United States Department of Labor v. American Future Systems Inc., 873 F.3d 420 (3d Cir. 2017).

While some state laws require employers to give employees rest breaks, the major federal wage and hour law, the Fair Labor Standards Act (“FLSA”) does not. However, under federal regulations, if the employer does provide breaks between five and 20 minutes, it must pay employees for those breaks as “hours worked.” C.F.R. 785.18. The rationale is that those breaks primarily benefit the employer by increasing the efficiency of the employee.

In American Future, the company originally had a break policy that gave employees two 15-minute paid breaks per day. Then, it eliminated the breaks and switched to a “flex time” policy, which let employees decide when, why, and for how long to log off their computers. Under the “flex time” policy, employees were only paid for time logged off their computers if it was 90 second or less.

The company argued that it should not have to pay its employees for “flex time” breaks longer  than 90 seconds because employees were able to log off their computers whenever they wanted, to do whatever they wanted, and thus this time was not compensable “hours worked” as contemplated in the federal regulations. The Department of Labor argued that when “flex time” breaks lasted 20 minutes or less, employees didn’t really have time to do anything other than activities that primarily benefit the employer, and should therefore be compensated for this time.

The Court agreed with the Department of Labor and found that the company’s policy was just an unpaid break policy by another name:

“According to [the company], if an employer has a policy allowing employees to log off and leave their work stations at any time, for any reason, it does not have to compensate employees if they take a break. [The company] does not deny that it permits employees to log off; it just refuses to call those time periods “breaks” … The policy that [the company] refers to as “flexible time” forces employees to choose between such basic necessities as going to the bathroom or getting paid unless the employee can sprint from computer to bathroom, relieve him or herself while there, and then sprint back to his or her computer in less than ninety seconds … That result is absolutely contrary to the FLSA.” American Future, supra, at *8.

The company also argued that setting a bright-line rule at 20 minutes for compensable breaks would induce employees to abuse the rule by taking multiple19-minute-or-less breaks in a day. The Court disagreed with this argument, stating that, “[W]here the employee is taking multiple, unscheduled nineteen-minute breaks over and above his or her scheduled breaks for example, the employer’s recourse is to discipline or terminate the employee—not to withhold compensation.” American Future, supra, at *19-20, quoting Hawkins v. Alorica, Inc., 287 F.R.D. 431, 442 (S.D. Ind. 2012).

Thus, under the Third Circuit’s new decision in American Future, employers must compensate employees for breaks that are 20 minutes or less, and employees should avoid abusing the break policy or risk discipline or termination.

If you have been denied pay for short breaks, contact this office at 732-325-0318 to discuss your options.

“How much do you get paid?” This is a question that many employers tell employees never to ask or answer, and some employers go as far as telling employees it’s a fireable offense. But is this legal? What if you’re trying to find out how your salary compares to other employees across genders or races? Or talking to other employees about unionizing? The answer is that federal and some state laws protect your right to inquire about and disclose salary information to other workers.

Under the federal National Labor Relations Act of 1935 (NLRA), workers in every state—whether part of a union or not—are guaranteed the right to undertake “concerted activities” to organize for collective bargaining, which includes the right to discuss pay rates, and differences in pay rates between workers. 29 U.S.C. § 157. Under the NLRA, an employer commits an “unfair employment practice” if it “interfere[s] with, restrain[s], or coerce[s] employees in the exercise of” these rights.

29 U.S.C. § 158(a)(1). Simply put, according to NYU law professor Cynthia Eastlund, the NLRA “means that you and your co-workers get to talk together about things that matter to you at work,” one of which is pay. The NLRA does not, however, protect supervisors or independent contractors, and generally doesn’t allow a worker to bring a private lawsuit. The National Labor Relations Board (“NLRB”) must enforce the law, and the remedy is generally an injunction rather than money damages.

Several states also have laws that specifically protect the rights of workers to discuss their wages. In New Jersey, the Law Against Discrimination was updated in 2013 to protect this right. The law states that it is unlawful for any employer to retaliate against an employee for discussing “the job title, occupational category, and rate of compensation, including benefits . . . or the gender, race, ethnicity, military status, or national origin of any employee or former employee of the employer,” so long as the purpose of the discussion is to investigate possible pay discrimination. N.J. Stat. §10:5-12(r).

If you think you have been discriminated or retaliated against at work, contact us at 732-325-0318.

Hundreds of employees of Bloomberg who assist customers with their Bloomberg terminals have been certified as a class and can proceed with their federal lawsuit to recover unpaid overtime wages.

The named plaintiff, Eric Rosenman, filed the suit in the U.S. District Court for the Southern District of New York in 2014, alleging that he and the other analytics representatives in the New York office of Bloomberg were not being paid legally required overtime wages at time-and-a-half for hours over 40 in each workweek. Analytics representatives help Bloomberg customers operate Bloomberg Terminals, which are complex software systems that give customers access to financial data and analytics. There are approximately 1,300 analytics representatives who do this work in Bloomberg’s New York office.

In August 2016, the plaintiff filed a motion to certify a class including all the analytics representatives in the New York office. In an opinion filed September 21, 2017, U.S. District Court Judge for the Southern District of New York Denise L. Cote focused on the issue of “predominance,” which is one of the requirements to certify a class under Federal Rule of Civil Procedure 23(a). The rule requires that “questions of law or fact common to class members predominate over any questions affecting only individual members.”

Bloomberg argued that “the responsibilities of the class members are so varied that the class members do not share a primary duty and that no generalized proof can be used to identify a single primary duty for the class.” But, in deciding to certify the class, Judge Cote held that “individual issues … do not predominate . . . . The evidence presented by both plaintiffs and the defendant converge on one, basic point: Analytics representatives answer client questions about the Bloomberg Terminal. This is their primary duty.”

We will continue to follow this case as it develops.

On August 17, 2017, the U.S. Court of Appeals for the Third Circuit held that a dancer who sued a club under federal and state labor laws can pursue her claims in court, despite the arbitration clause in her contract with the club.

Alissa Moon, an exotic dancer, sued Breathless Mens’ Club in 2015, claiming that the club misclassified its dancers as independent contractors, and claiming that because the dancers were in fact employees, the club owed them unpaid overtime wages and other legal protections like workers’ compensation insurance. Moon brought a collective action under the federal Fair Labor Standards Act (“FLSA”), the New Jersey State Wage and Hour Law (“NJWHL”), and the New Jersey State Wage Payment Law (“NJWPL”).

The club moved to dismiss Moon’s claims, arguing that she could not bring her case in court because the parties’ contract included an arbitration clause. The U.S. District Court for the District of New Jersey agreed, holding that Moon’s claims fell within the arbitration clause, and dismissed the case.

Moon appealed, and the U.S. Court of Appeals for the Third Circuit reinstated her case, holding that the arbitration clause did not cover Moon’s statutory claims because the clause failed to clearly state that the employee agreed to arbitrate all statutory claims arising from the employment relationship, didn’t reference the types of claims the employee was waiving (the court used workplace discrimination claims as an example of a type of claim the clause could reference), and didn’t explain the difference between arbitration and litigation. Because of these deficiencies, the court held that Moon had not agreed to arbitrate her statutory claims, and that because her claims arose under the FLSA, NJWHL, and NJWPL—not under the contract—she could pursue her claims in court.

A Wisconsin company has generated a lot of recent press for being the first company in the United States to microchip its employees, but it is also generating a fair amount of controversy. The company, Three Square Market, which makes vending machine software, is offering optional Radio Frequency Identification (commonly referred to as “RFID”) chips to employees, implanted in the skin between the thumb and forefinger.

The chips, about the size of a grain of rice, would allow employees to unlock company doors, share business cards, use copy machines, and log on to their computers. The chips could also perform non-work-related functions like storing medical records and passports, making purchases with credit card information, and more. But the chips could also make wearers vulnerable to hackers who could steal personal information and possibly track wearers’ movements, or to unscrupulous bosses or tech-savvy coworkers who have an inappropriate interest in wearers’ activities—not to mention the biological risks such as infection at the implantation site, and rejection or migration of the microchip.

Supporters of the chips say we’ve been safely microchipping pets for years, and your cell phone already allows corporations, governments, and hackers to track your movements, so why not have the convenience of your keys, wallet, and ID right there in your hand where you can never lose or forget them? Skeptics say that chips could easily share too much information with coworkers or supervisors, not to mention identity thieves, or domestic abusers or stalkers looking to find out as much information about a person as possible.

“Companies often claim that these chips are secure and encrypted,” said Alessandro Acquisti, an information technology and public policy professor at Carnegie Mellon University’s Heinz College, in an interview with the New York Times. But Acquisti says when a company claims a chip is encrypted, it could mean “anything from a truly secure product to something that is easily hackable.”

Companies and employees will have to grapple with a number of issues related to microchipping workers if the technology becomes more mainstream. While the chips could be an easy way for employers to keep accurate time records for hourly workers, they could also be used to track the exact amount of time an employee spends in the bathroom or out to lunch, without the employee’s permission.

The ownership of the microchip and its data is another issue. In Three Square Market’s case, the company owns the $300 microchips and is providing them to employees at no cost, which is a great deal for an employee who is interested in getting in on the first wave of a new technology, but what happens when that employee leaves the company for a new job? Will the microchip have to be removed, or can it be purchased by the employee or their new employer? Who owns the data on the microchip, and will employers allow that data to be transferred to a new microchip for free? Many of these questions are currently unanswered, and will likely be the subject of future litigation and new state or federal laws.

In the meantime, we can expect more companies and employees to begin considering the benefits and drawbacks of employee microchips. According to Three Square Market, the majority of it employees had a positive reaction and want to be microchipped. It remains to be seen whether this technology will catch on with other U.S. companies, and if microchipping will become the new company ID card.