New Jersey Overtime Laws

September 17th 2024

It is common for employees to work beyond their normal hours of work. However, according to New Jersey Labor Laws, employers are required to compensate employees for their overtime.

In New Jersey, you are entitled to time-and-a-half for every hour worked over 40 in a week.

This article will provide you with the information to successfully navigate New Jersey’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

New Jersey Overtime Rates

Overtime law in New Jersey is generally aligned with the federal Fair Labor Standards Act (FLSA). For any hours worked beyond a total of 40 in one work week, the majority of hourly employees in New Jersey have the right to an overtime pay rate.

Overtime in New Jersey is set at 1.5 times the regular hourly rate for workers who exceed 40 hours a week. 

Since the regular New Jersey minimum wage is $15.13 per hour, that makes New Jersey’s overtime minimum wage $22.70 per hour (1.5 times the minimum wage).

Overtime Entitlement in New Jersey

According to New Jersey overtime laws, overtime pay is required for any non-exempt employees.

Employees who earn below $844 a week ($43,888 annually) and work in a non-exempt industry are entitled to overtime pay.

However, your overall eligibility for overtime pay will be based on what your job duties are as well as what type of business you are in.

Read more about Overtime Exceptions and Exemptions in New Jersey.

Refusing to Work Overtime in New Jersey

Employees are not allowed to refuse overtime work if their employer has requested them to work. The New Jersey State Wage and Hour Law (NJSWHL) has stated that employers are allowed to force their employees into overtime as part of their employment conditions.

This New Jersey state law is aligned with the Fair Labor Standards Act (FLSA) which states that employers can fire an employee who refuses overtime work.

The only exception to this overtime rule is for healthcare facility employees. Such employees cannot be subjected to excessive work hours unless they have voluntarily agreed to. Additionally, an employer cannot dismiss, terminate or invoke disciplinary action on them if they refuse overtime. 

“Compensatory Time” in New Jersey

In New Jersey, only state or local government employers are allowed to offer compensatory time (“comp time”) to their employees for their overtime hours worked.

Comp time is when employees take time off instead of receiving overtime pay

Employees can choose between this or the regular overtime payment. Both will be given at a rate of time-and-a-half for every overtime hour worked.

If an employee has been terminated, their unused comp time will be converted to regular cash overtime compensation.

Overtime for Tipped Employees in New Jersey

A tipped employee in New Jersey is entitled to overtime compensation. However, their minimum wage is lower than the standard state minimum wage.

Before we continue, it is important to understand what a tip credit is. 

A tip credit is a system that enables employers to pay tipped employees a lower minimum wage. Simply take the standard state minimum wage minus what the tipped employee is paid. 

In this case, the New Jersey minimum wage is $15.13 and the minimum tipped employee wage is $5.26 which makes the tip credit $9.87. 

If a tipped employee works overtime hours, their overtime rate will be calculated based on the full minimum wage, and not the lower wage that they are being paid.

The employer is not permitted to take a higher tip credit for an employee’s overtime hours as they do with regular hours.

Overtime for Salaried Employees in New Jersey 

Salaried employees who are non-exempt (entitled to overtime) must divide their salary by the number of hours that salary compensates for to get their regular rate to further calculate their overtime rate.

Non-exempt salaried employees may be eligible for overtime pay under the Fluctuating Workweek Method (FWW), which applies to those who earn a fixed salary but have a fluctuating workweek. These employees may receive an overtime premium of one-half their regular hourly wage for hours worked over 40.

Once the regular rate is established, calculating overtime for salaried employees is as follows:

  • If an employee’s salary covers less than 40 in a workweek, their regular rate will be added for every subsequent hour working up to the 40. Only after 40 hours will time-and-a-half be counted.
  • If an employee’s salary covers 40 in a workweek, then time-and-a-half will be paid for any hours over 40.

Calculating Overtime with Commission in New Jersey

Employees in New Jersey who receive commissions are eligible for overtime at a rate of 1.5 times their regular hourly rate. Their regular hourly rate must include the commissions earned as well. However, they will only be given half of that rate for every overtime hour.

For example, let’s say an employee works 45 hours a week at a rate of $10/hour and receives $100 in commissions for that week. We need to first calculate the new regular hourly rate.

To do so:

(Total hours x Hourly Rate) + Commission

= (45 x 10) + 100

= $550 (new regular hourly rate)

Then, divide that by the total hours worked in the week.

= 550 / 45

=$12.22

Now, to determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.

$12.22 / 2

= $6.11 (commissioned employees’ overtime rate)

Since the employee worked an extra 5 hours in the week, that makes his overtime compensation $30.56 ($6.11 x 5 hours).

The amount will vary according to the hours worked, hourly rate, and commission earned.

Overtime Exceptions and Exemptions in New Jersey 

According to New Jersey law, certain salaried employees are exempt from receiving overtime pay. These employees include:

  • Executives
  • Administrative workers whose earnings come from commissions and total compensation of at least $400 per week
  • Professional employees
  • Outside sales employees
  • Employees of a common carrier of passengers by motor bus
  • Hotel workers
  • Farmworkers
  • Limousine drivers employed by a limousine business
  • Livestock workers
  • Employees at nonprofit or religious summer camps, conferences, and retreats during June, July, August, and September

Statute of Limitations For Unpaid Overtime Claims in New Jersey

According to New Jersey law, the statute of limitations for filing a complaint regarding overtime (or other unpaid wages) is 6 years.

Penalties for Not Providing Overtime Pay to Employees in New Jersey

The law in New Jersey protects employees from facing any retaliation from their employers after filing a claim for unpaid overtime compensation.

In New Jersey, employees can recover up to 200% in liquidated damages for unpaid overtime wages. This is equivalent to 3 times the amount of overtime compensation that was due. Employers may also be subjected to paying for the employees’ attorneys’ fees, should the violation be brought to court.

It is advisable to consult with an attorney regarding overtime violations as penalties may vary based on the severity of the case.

Legal Cases Relating to Overtime Compensation in New Jersey

Below, we present law cases relating to fair overtime compensation for employees in New Jersey: 

1. Dairy Product Supplier Pays $100k in Back Wages to Employee

In the case of Branch v. Dairy, a truck driver, Elmer Branch, sued his employer, Cream-O-Land Dairy (Dairy), for not providing him with overtime compensation. Branch claimed that he put in over 40 hours of work per week, but was not given any pay for those extra hours. This is a violation of the New Jersey Wage and Hour Law (NJWHL). 

Dairy believed they were not subject to paying overtime as they had received a determination from the New Jersey Department of Labor and Workforce Development (DOL) that their truck drivers were not entitled to overtime pay.

The trial court had granted Dairy’s motion for a summary judgment (judgment against one party without a full trial) which dismissed Branch’s claims. The trial court also stated that Dairy was entitled to NJWHL’s good-faith defense (this allows an employer to avoid paying overtime if they can prove that they reasonably believe they shouldn’t).

Branch decided to appeal this decision to the New Jersey Appellate Division. This division reversed the initial trial court’s decision and chose to reinstate Branch’s lawsuit. 

Dairy was required to pay a total of $100,000 to Branch ($75,000 in back wages and $25,000 in liquidated damages).

Key lessons from this case:
  • The good-faith defense may not always be successful.
  • A summary judgment can still be reversed. Although getting dismissed by the trial court, appealing your case to the Appellate Division can ensure that you are given another chance to claim your rights.
  • An employer needs to be fully aware of their legal obligations towards their employees.

2. Baking Product Manufacturer To Pay $1.2M in Overtime Back Wages

In the case of Oddo et al v. Bimbo Bakeries U.S.A. INC. et al in 2016, four employees, who were Route Sales Representatives (RSRs), alleged that Bimbo Bakeries failed to provide them with overtime compensation for all hours worked exceeding 40 in a week. The RSRs also claimed that Bimbo Bakeries failed to pay them for hours worked on weekends and holidays.

Bimbo Bakeries sought to dismiss the lawsuit and stated that the RSRs were exempt from overtime pay as they were independent contractors instead of employees. The district court had denied Bimbo Bakeries’ motion to dismiss. The court found that those RSRs were considered employees under the Fair Labor Standards Act (FLSA) and New Jersey state law.

By the end of this trial, the jury had favored the RSRs and found Bimbo Bakeries to violate the FLSA. The jury awarded the RSRs with an amount of $1.2 million in damages. $ 1 million was to be paid to the four RSRs in individual lump sums and the remaining $500,000 was to be paid to the attorneys.

However, Bimbo Bakeries had filed a motion for a new trial. This motion is currently still pending.

Key lessons from this case:
  • The denial of Bimbo Bakeries’ motion to dismiss the case shows that overtime lawsuits can still proceed even when an employer tries to challenge an employee’s claims.
  • The fact that the employer’s motion for a new trial is currently pending shows that both the employers and employees need to be prepared for a lengthy litigation process.
  • An employer should familiarize themselves with the legal obligations that come with hiring a worker. They must also properly classify their workers (as employees or independent contractors) beforehand to avoid further confusion and issues.

3. Former Law Firm Employee Seeks Compensation for Overtime Back Wages

In the case of Rosenblatt v. PRESSLER, FELT & WARSHAW, LLP, Scott Rosenblatt, an IT hardware technician, claimed that he was constantly required to work beyond his normal hours without overtime compensation from 2012 until 2017. Rosenblatt filed a lawsuit against his former employer, Pressler Felt & Warshaw (which is a law firm) in 2017 after he was terminated.

Rosenblatt claimed that Pressler violated the Fair Labor Standards Act (FLSA) and the New Jersey Wage and Hour Law (NJWHL) by not providing overtime compensation. Rosenblatt further alleged that his employment termination was retaliation because he had complained about his wages. This would be a violation of the New Jersey Conscientious Employee Protection Act (CEPA).

A settlement was proposed, which included a payment of $115,241 to Rosenblatt. $72,000 went directly to Rosenblatt for the alleged overtime back wages and liquidated damages, while the remaining $43,241 went to his attorneys’ fees.

The court approved this settlement and dismissed it with prejudice (indicating that the case is closed and cannot be brought before the court again).

Key lessons from this case:
  • The New Jersey Conscientious Employee Protection Act (CEPA) protects employees from retaliation by employers for complaining about unpaid overtime wages.
  • Employees and employers who are in dispute about unpaid overtime wages can opt for a settlement agreement to avoid further escalation.
  • Settlement agreements should be reasonably fair to the employee while also complying with New Jersey laws.

Learn more about New Jersey Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.