Guide to New Jersey employee benefits and HR rules

Is your business compliant with New Jersey's employment laws?

If your organization is based in New Jersey, or if you employ New Jersey workers, you need to know the ins and outs of benefits and HR compliance for New Jersey. This guide will provide a general overview of New Jersey's regulations for small to medium size businesses.

Topics covered in this guide include:

• What are employment laws in New Jersey?
• What are employee rights in New Jersey?
• Required and non-required employee benefits in New Jersey
• Wage laws in New Jersey
• HR and hiring requirements in New Jersey
• Health insurance in New Jersey

What are employment laws in New Jersey?

The federal government typically requires employers to follow basic employment laws at their organization for certain employee benefits and HR regulations. But some states choose to implement their own employment laws. 

While New Jersey generally follows federal laws regarding most employment regulations, it has many employment laws that provide even greater protections to workers than federal laws do. In fact, this is one reason why New Jersey is among the friendliest states for workers, especially for remote workers.

Below are state-specific employment laws for New Jersey:

• At-will employment
• New Jersey employees are employed on an “at-will” basis. This means an employer can fire an employee at any time without employer notice and for any reason unless they have a specific contract stating otherwise. Employers aren’t legally required to provide a reason for termination.
• However, employers are prohibited from firing employees based on discriminatory purposes, such as for their race, national origin, gender identity, sex, color, religion, sexual orientation, gender, age, medical reasons, etc.
• New Jersey Civil Rights Act
• The New Jersey Civil Rights Act prohibits employers from violating an employee’s rights under the U.S. Constitution, the New Jersey Constitution, and other New Jersey laws. 
• New Jersey Law Against Discrimination
• New Jersey employers can’t discriminate against employers because of their race, religion, national origin, disability, age, sex, or sexual orientation. It also covers other protected characteristics, like marital status, ancestry, or genetic characteristics.
• This law provides broader and stronger protections than federal workplace discrimination laws as victims can be compensated for emotional pain and suffering and punitive damages, which federal law doesn’t allow.
• Worker’s Compensation
• Most New Jersey employers are mandated by law to carry workers’ compensation insurance coverage providing workers with compensation for medical treatment, vocational rehabilitation, and a portion of their regular earnings.
• New Jersey Anti-Wage Theft Law
• Victims of wage theft, including paying an employee less than minimum wage, not paying overtime, etc., can receive unpaid wages plus damages equal to 200% of the unpaid wages. The act also covers wages lost because of retaliation and attorney’s fees.
• Employees can file for wage theft for up to six years.
• Temporary Disability Benefits Law
• This Law protects against wage loss due to an inability to perform regular job duties due to injury or illness.
• Employers are required to pay disability insurance taxes and give the Division of Temporary Disability Insurance information about their employees when they file claims for disability benefits.
• New Jersey Conscientious Employee Protection Act
• This Act prohibits employer retaliation against employees who blow the whistle regarding improper, deceptive, or illegal conduct by their employer, or conduct that relates to improper patient care by a healthcare provider.
• It also prohibits retaliation if an employee provides information or testifies in a government agency hearing or investigation.
• Millville Dallas Airmotive Plant Job Loss Notification Act
• An employer with 100 or more full-time employees that has been in business for longer than three years must provide at least 60 days' notice, or as much notice as is required by the federal Worker Adjustment and Retraining Notification (WARN) Act, in the event of a mass layoff.
• Notice must be provided to each employee to be terminated, the chief elected official of the municipality, and the Commissioner of Labor and Workforce Development.
• New Jersey Child Labor Law
• All minors under the age of 18 who work in New Jersey must have an employment certificate, also known as "working papers," or a special permit. A certificate is required for each employer. 
• New Jersey Crew Leader Registration Act and Selected Farm Labor Laws
• This requires the registration of crew leaders, outlines the minimum wage and wage payment schedule, authorizes the investigation and site inspection of migrant farm labor camps, drinking water and toilet facilities, independent contractors, growers, and food processors that operate within the state.
• New Jersey Legal Holidays Laws
• In addition to observing the legal federal holidays, New Jersey observes the following as legal holidays: Lincoln Day, Good Friday, and general election days.
• New Jersey Industrial Home Work Law and Regulations
• This requires the issuing of licenses, permits, and certificates for employers and home-based businesses involved in the manufacturing, altering, finishing, and distribution of specific articles, materials, and goods.
• The manufacturing of apparel in the home by a home worker performing work for an apparel manufacturer or contractor is prohibited.

Now that we’ve gone over the New Jersey-specific laws, we’ll review the state’s employee rights.

What are employee rights in New Jersey?

Employees in New Jersey have many rights under state and federal law. If you have or plan to hire employees in the state, you'll need to know what protected rights your employees have, no matter the size of your organization.

Some state rights include:

• Fair wages
• Employers must pay at least the state minimum wage and overtime pay. 
• Meal breaks
• New Jersey labor laws require employers to provide employees under the age of 18 with a 30-minute break after five consecutive hours of work.
• Employers aren’t required to provide paid breaks, including meal breaks, for employees 18 years or older. 
• However, if employers allow them, breaks lasting less than 20 minutes must be paid. Lunch breaks of 30 minutes or more don’t have to be paid.
• Nursing mother breaks
• Employers must allow nursing employees to take reasonable breaks each day to express breast milk unless allowing the employees to take nursing mother breaks would cause an undue hardship.
• Safety in the workplace
• The Occupational Safety and Health Act requires employers to provide a safe workplace that is free of known dangers. Employers must also provide safety equipment, training, and safe working conditions for your particular industry.
• Hostile working environment protections
• The New Jersey Law Against Discrimination prohibits sexual harassment, including unwelcome sexual advances, requests for sexual favors, or any other verbal or physical conduct of a sexual nature, from employers, coworkers, supervisors, or subcontractors.
• Employee privacy
• Employers may only listen in on phone correspondences for specific purposes, such as quality assurance and training. Employees must be informed their correspondences will be monitored before making the call.
• Defamation of character 
• If a previous employer gives an employee a bad reference out of spite or exaggeration, the employee may file a defamation case.
• Discrimination against tobacco and cannabis users
• Employers of all sizes are prohibited from discriminating or taking adverse actions against employees because they either do or do not use tobacco or cannabis products.
• This only applies to retaliation using the products outside of work. Policies for a smoke-free or drug-free workplace are allowed.
• Discussion of wages
• Employees are permitted to ask current or former coworkers about their compensation for the purposes of investigating or taking legal action regarding discriminatory pay practices. 

Required and non-required employee benefits in New Jersey

Some employee benefits are required under New Jersey labor laws, in addition to federal regulations. However, some benefits that may be required in other states don’t apply in New Jersey. Many benefits are left up to the individual businesses’ discretion.

In the chart below, we outline a few state-specific employee benefits so you know what you should offer at your organization.

Wage laws in New Jersey

Wages and compensation in New Jersey are impacted by various state laws. We've compiled the most important requirements to know below.

Minimum wage laws

New Jersey has a state minimum wage that exceeds the federal minimum wage.

Most employees have minimum wage protection under the law with a few exceptions, such as outside and automobile salespersons and minors under the age of 18 (except for minors that work in specific industries).

Tipped employees’ total earnings, meaning their hourly rate plus tips, must equal at least the state’s minimum wage per hour. The suggested rate is currently $5.13 per hour; however, the hourly rate is up to the employer as long as the minimum threshold is met.

Compensable time

All time an employee is required to be at work or on duty should be counted as hours worked. An employee who reports for work at the employer’s request must be paid for at least one hour at their regular wage rate, except where the employer and employee have agreed on the minimum number of hours to work that day before the work day ends. 

“On call” time doesn’t need to be counted toward work hours when the employee isn’t required to remain on the job site and is free to do as they choose, as long as the employer knows where they can be reached. If an employee goes out on an on-call assignment, only the time spent making the call is considered hours worked.

Notice of pay rate

Employers must notify all employees of their rate of pay and regular pay schedule at their time of hire. Employers must also notify all employees of any changes to their pay rates or pay schedule in enough time before the changes. 

An employee’s pay rate may be reduced as long as the employer gives the affected employee advance notice and the reduction doesn’t bring the pay rate below the state minimum wage.

Equal pay

The New Jersey Equal Pay Act makes it unlawful for employers to compensate employees, including benefits, of a protected class protected less than the rate paid to employees outside the class for similar work when considering all factors, such as skill, effort, and responsibility.

The purpose of this law is to make it unlawful for employers to engage in discriminatory compensation practices. However, an employer may pay a different rate of compensation if they prove the decision was made based on non-discriminatory business reasons, such as seniority or merit.

Payment of wages

Employers must pay the full amount of wages due to employees in cash, by direct deposit, electronic paycards, or with checks that can be cashed in full at banks where arrangements have been made to cash without difficulty. The employer must pay any check cashing fees charged by the bank.

Paying by direct deposit or electronic paycards is only allowed if the employee provides written consent.

Pay frequency

Non-exempt employees must receive their full wages due at least twice a month and on regular paydays designated in advance. Exempt employees must be paid in full at least once a month on a regularly established schedule.

If a regular payday falls on a day when the business is closed, employees must be paid on the previous workday, unless a collective bargaining agreement states otherwise.

Overtime pay

According to the Wage and Hour Law, employers must pay employees time and one half per hour for actual hours worked over 40 hours. Certain exemptions include any individual employed in an executive, administrative, or professional capacity.”

In the event of a dispute, the New Jersey Wage Collection Law (NJWCL) allows aggrieved employees to demand and collect all “wages” due and owing to them, including commissions and bonus payments.

When the employee presents proof that they are entitled to unpaid overtime wages, the employer may refute the right to an exemption from the overtime obligation based on the employee's salary, duties, and work at that time.

Wage deductions

The New Jersey State Wage Payment Law (NJSWPL) stipulates the time, manner, and method of payment, and prohibits the withholding of wages for illegal deductions, such as damage or cash register shortages.

Under state law, wages may be withheld only when the employer:

• Is required to do so by state or federal law (i.e., IRS withholding)
• Is ordered to do so by a court (i.e., child support payments)
• The employee's written authorization for the deduction and the purpose is lawful (i.e., for health or retirement benefits). 
• Written employee authorizations must meet certain requirements.

All employers must provide each employee with a statement of deductions made from their wages for each pay period that deductions were made.

Final pay

If an employee is terminated, suspended, or laid off, or the employee resigns for any reason, the employer must pay the employee all wages due by the regular payday in the pay period that the termination, suspension, or resignation occurred.

An employer has an additional ten days to pay if an employee is suspended due to a labor dispute involving employees who make up the payroll.

An employer may pay all wages owed to a deceased employee in the following order to the employee's:

• Surviving spouse
• Children age 18 and older in equal shares or to the guardian of children under age 18
• Father and mother, or survivor
• Siblings
• The person who pays the funeral expenses

Severance pay

New Jersey labor laws don’t require employers to provide employees with severance pay. However, if an employer chooses to provide severance benefits, they must comply with the terms of its established policy or employment contract.

Wage laws for specific industries

The New Jersey Prevailing Wage Act states the payment of prevailing wage rates for workers on construction projects and establishes a fair bidding mechanism for both union and non-union workers.

Construction employees eligible for prevailing wages include those that work on federal or state government or government-funded construction projects or perform certain federal or state government services. Prevailing wage rates may be different from the state’s minimum wage.

The State Building Service Contracts Act stipulates the payment of federal wage and benefit rates for workers performing "building services" for properties or premises owned or leased by the state.

For healthcare workers, the Wage and Hour Law defines the conditions under which healthcare facilities may require certain hourly employees to work overtime. 

The law also authorizes the employment of disabled individuals by charitable organizations or institutions at a rate less than minimum wage and requires special permits to be issued detailing the duration, type of work performed, and the payment of wages.

HR and hiring requirements in New Jersey

In addition to laws regarding employee benefits and compensation, New Jersey has other unique HR rules regarding recruiting and hiring that you need to know about.

Background checks

An employer may obtain an applicant's credit report if they notify the applicant in writing beforehand that the report may be used for employment purposes and the applicant has consented. 

Employers may also inquire about an applicant's conviction record if the prior convictions are reasonably related to the job position. However, an employer can’t inquire into an applicant’s prior arrest record.

Unemployment discrimination in job advertisements

New Jersey law prohibits employers from publishing, in print or online, any job advertisement that makes current employment a job qualification, indicates that applications of unemployed individuals won’t be considered, or states that only applications of those that are employed will be considered.

This doesn’t apply to setting specific qualifications for a job, such as holding a professional or occupational license or having a minimum level of training.

Social media privacy

Employers are prohibited from requiring current or prospective employees to provide usernames and passwords for their personal social media accounts or forcing employees to provide access to these accounts.

Employers are subject to penalties for taking any adverse action against an employee for failing to provide such information.

Ban the box

The Opportunity to Compete Act prohibits employers with 15 or more employees from making any verbal or written inquiry about an applicant's criminal record during the initial employment application process until after the employer conducts the first interview. 

Employers can refuse to hire an applicant for employment based on the applicant’s criminal record. If inquiries or searches are made before the first interview, employers may be subject to monetary penalties, including a $1,000 fine for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation.

Salary history inquiry restrictions

Employers are prohibited from making salary history inquiries and salary-related activities, including:

• Screening applicants based on their salary history, which includes prior wages, salaries, or benefits, or
• Requiring that an applicant's salary history satisfies any minimum or maximum criteria.

An employer may:

• Use salary history to determine the applicant's salary, benefits, and other compensation. They can also verify salary history if it’s voluntarily disclosed.
• Request written authorization from an applicant to confirm salary history after an offer of employment has been made.

Drug testing

New Jersey doesn’t have any requirements regarding drug testing in the workplace. However, employers are typically permitted to hold pre-employment testing, reasonable suspicion testing, and random testing of employees that work in safety-sensitive positions.

Lie detector testing

Employers are prohibited from influencing, requesting, or requiring employees or applicants to submit to a lie detector test as a condition of employment or continued employment with limited exception. Employers that violate this law are guilty of a “disorderly persons” offense.

Reporting of new hires

All employers and labor organizations doing business in New Jersey must report the following information to the New Jersey Department of Human Services: 

1. The hiring of, or contracting with, any person who works in New Jersey and who will be receiving the wages.
2. The rehiring or return to work of any employee who is laid off, furloughed, separated, granted a leave without pay, or terminated from employment.

An employer must submit the required information within 20 days of the employee’s hiring, rehiring, or return to work. Employers that transmit reports magnetically or electronically must report every 15 days in accordance with rules adopted by the Commissioner of Human Services. 

The report must contain the employee’s: 

• Full name 
• Address
• Social Security number
• Date of hire
• Date of birth

Health insurance in New Jersey

The New Jersey Health Insurance Market Preservation Act requires all New Jersey residents to have a health insurance policy that meets minimum essential coverage (MEC) throughout the year. If you don’t qualify for a valid exemption to this, you’ll have to make a shared responsibility payment on your state income tax return. 

Designed to support the Affordable Care Act (ACA), this Actencourages more residents to get health coverage, stabilize New Jersey’s insurance market, and reduce health insurance premiums.

While this may be the case for individuals, no state law requires employers with fewer than 50 employees to offer health insurance coverage. However, the ACA requires employers with 50 or more full-time equivalent employees (FTEs) to provide insurance with minimum essential coverage (MEC).

But employers with fewer than 50 employees shouldn’t miss the opportunity to provide health benefits at their organization. Offering health benefits to your employees is a great way to attract and retain top talent.

While traditional group health insurance is a popular option, rising premium costs have made it challenging for small to medium size businesses to offer the benefit.

There are some alternatives for small business owners who can't offer group coverage due to minimum contribution or minimum participation requirements or who can't afford to pay for the high price of New Jersey insurance premiums.

Health reimbursement arrangement (HRA)

A health reimbursement arrangement (HRA) is an IRS-approved, employer-funded health benefit that allows you to reimburse your employees, tax-free, for their individual health insurance premiums and qualifying medical expenses.

With an HRA, you have complete control over your benefit while giving your employees more freedom to choose how they want to use their benefit.

Some HRAs, such as the individual coverage HRA (ICHRA), can satisfy the federal regulations for applicable large employers (ALEs).

Learn more about each HRA

Health stipend

A health stipend is a fixed sum of money offered to your employees to help pay for their medical care expenses. A health employee stipend isn't a formal group health plan, so you have complete control over which expenses are eligible for reimbursement.

This makes a health stipend an excellent option for small businesses looking to offer a health benefit that covers costs health insurance or HRAs may not cover, such as mental health expenses.

Frequently asked questions