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 employs New Jersey workers, you need to know the ins and outs of benefits and HR compliance in the state. This guide will provide a general overview of New Jersey's regulations for small to medium size businesses.

Topics covered in this guide include:

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

Which employment laws apply in New Jersey?

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

While New Jersey generally follows federal laws regarding employment regulations, many employment laws provide even greater protections to workers.

The following are state-specific employment laws for New Jersey:

• At-will employment
  • New Jersey employment is on an “at-will” basis. This means an employer can terminate an employee at any time without notice and for any reason unless they have a specific contract or agreement stating otherwise.
  • Employees may not fire employees based on discriminatory reasons, such as race, national origin, gender identity, sex, color, religion, sexual orientation, gender, age, or medical conditions.
• The New Jersey Civil Rights Act and NJ Law Against Discrimination
  • 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 employers can't discriminate against employees 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.
  • These laws provide broader and stronger protections than federal workplace discrimination laws, as the law may require you to compensate victims for emotional pain and suffering and punitive damages, which federal law doesn't allow.

• Anti-Wage Theft Law
  • Victims of wage theft, including employees paid less than minimum wage, can receive unpaid wages plus damages equal to 200% of the unpaid wages. The act also covers wages lost because of retaliation against an employer and attorney's fees. Employees can file for wage theft for up to six years.

• Temporary Disability Benefits Law
  • This law protects employees against wage loss due to their inability to perform regular job duties as a result of injury or illness.
  • Employers must 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 retaliation against employees who report improper, deceptive, or illegal conduct by their employer or conduct related 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
  • Employers with 100 or more full-time employees that have been in business for longer than three years must provide at least 60 days' notice, or as much notice as required by the federal Worker Adjustment and Retraining Notification (WARN) Act, in the event of a mass layoff.
  • Employers must notify each employee they plan to terminate, the chief elected official of the city or county, and the Commissioner of Labor and Workforce Development.
• New Jersey Child Labor Law
  • All minors younger than 18 who work in New Jersey must have an employment certificate, also known as "working papers," or a special permit. The state requires a certificate for each employer.
  • Minors must receive 30-minute meal breaks after five consecutive hours of work.
• New Jersey Crew Leader Registration Act and Selected Farm Labor Laws
  • This requires crew leaders for farm or food laborers to register with the state. It also outlines the minimum wage and wage payment schedule. It authorizes the investigation and site inspection of migrant farm labor camps, drinking water and toilet facilities, independent contractors, growers, and food processors within the state.
• New Jersey Industrial Home Work Law and Regulations
  • This requires employers and home-based businesses involved in the manufacturing, altering, finishing, and distributing of specific materials and goods to get licenses, permits, and certificates.
  • Manufacturing apparel in the home by a home worker performing work for an apparel manufacturer or contractor is prohibited.
• ABC test for employee classification
  • Under the New Jersey Unemployment Compensation Law, you must consider workers W-2 employees unless all of the following apply:
    
    • The employee is free from control or direction over their performance, such as instructions, training, setting work hours, providing tools, or having the right to terminate employment.
    • The employee performs their work outside of the usual course of business or outside of the place of business.
    • The employee is usually engaged in independent business.
  • Employees who pass the above tests can be considered independent contractors.

Now that we've covered 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.

State employee rights include:

• Fair wages
  • The New Jersey State Wage and Hour Law require employees to pay at least the state minimum wage. It also requires employers to pay time and one half for every hour an employee works in excess of 40 per week.
• Breaks for nursing mothers
  
  • 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 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 to phone correspondences for specific purposes, such as quality assurance and training. You must inform employees that you will monitor their calls before starting 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 do or don’t use tobacco or cannabis products outside of work. Employers may establish smoke-free and drug-free workplaces during work hours.

• Discussion of wages
  • Employees may ask current or former coworkers about their compensation to investigate or take 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, most employee benefits are left up to the individual businesses' discretion.

Required workplace accommodations

New Jersey law requires employers to make reasonable accommodations for employees with disabilities unless it would create undue hardships for the organization.

The New Jersey Pregnant Workers Fairness Act requires employees to provide reasonable accommodations for employees who are currently pregnant, recovering from childbirth, breastfeeding, or dealing with pregnancy-related medical conditions. The federal Fair Labor Standards Act (FLSA) also requires employers to provide a private place for nursing mothers to express breast milk. This can’t be a bathroom or public area subject to intrusion.

Required employee benefits

The table below outlines a few state-specific employee benefits, so you’ll know what you must offer at your organization.

Health insurance in New Jersey

While the state doesn’t require employers to provide health insurance to their employers, the federal government may require you to do so.

Under the Affordable Care Act’s (ACA) employer shared responsibility provisions, also known as the employer mandate, all employers with 50 or more full-time equivalent employees (FTEs) must provide health insurance with minimum essential coverage (MEC) that meets minimum value and affordability requirements.

But even if you have fewer than 50 employees, you should still offer health benefits. Offering health benefits to your employees is an excellent way to attract and retain top talent.

The New Jersey Health Insurance Market Preservation Act also requires all residents to have a health insurance policy that meets MEC. If they don’t qualify for a valid exemption to the law, they’ll have to made shared responsibility payments on their state income tax returns. The act encourages more residents to get health coverage, stabilizes New Jersey’s insurance market, and reduces health insurance premiums.

By offering qualifying health benefits to your employees, you can help them avoid penalties.

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

Small group health insurance premiums in some New Jersey counties can get as high as $613 per month. In contrast, the average monthly premium for individual policies is often more affordable. This makes covering the cost of individual health plans more accessible than offering a group plan.

Employers can take advantage of these savings by offering a health reimbursement arrangement (HRA) or a health stipend.

Health reimbursement arrangement (HRA)

An 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 and budget while giving your employees more freedom to choose how to spend their allowances.

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 and wellness employee stipends

An employee stipend is a fixed sum of money you can offer to your employees to help pay for various expenses. A health stipend allows you to provide an allowance for medical expenses, while a wellness stipend is a great way to support your employees’ diverse wellness needs, like gym memberships or meditation apps.

While stipends are flexible benefits, they are generally taxable. They also don’t satisfy the ACA’s employer mandate for organizations with 50 or more FTEs.

Wage laws in New Jersey

Various state laws impact wages and overtime laws in New Jersey. 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. The state minimum wage rates apply to all employers in the state.

Every year starting in 2025, the state minimum wage will increase according to the consumer price index (CPI). Minimum wage increases for small businesses will continue until they reach $15/hour in 2026.

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 hourly rate is currently $5.13 per hour; however, the hourly rate is up to the employer as long as the minimum threshold is met.

*New Jersey’s minimum wage increases are subject to increases in the CPI. The 2024 estimates may change.

Compensable time

You should count all time that an employee must be at work or on duty 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 when the employer and employee have agreed on the minimum number of hours to work that day before the work day ends.

Employers don’t need to count “on call” time toward work hours if they don’t require the employee to remain on the job site and the employee’s free to do as they choose during that time. If an employee goes out on an on-call assignment, only the time spent completing the assignment 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 schedules before the changes.

You may reduce an employee's pay rate if you give 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 of a protected class protected less than the rate paid to employees outside the class for similar work. 

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 compensation rate if they prove they made the decision 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 pay cards, or with checks that employees can cash in full. The employer must pay any check cashing fees charged by the bank.

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

Pay frequency

Non-exempt employees must receive their full wages due at least twice each month and on regular paydays designated in advance. Exempt employees must be paid in full at least once per 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 per week. Certain exemptions include any individual employed in an executive, administrative, or professional capacity.

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

Wage deductions

TheNew 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

Suppose you terminate, suspend, or lay off an employee or the employee resigns for any reason. In that case, the employer must pay the employee all wages due by the regular payday in the pay period when the termination, suspension, or resignation occurred.

An employer has an additional ten days to pay if they suspend an employee 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

An amendment for the New Jersey WARN Act took effect in 2023 that requires employers to provide laid-off workers with one week of severance pay for each full year of employment. This applies to any mass layoff of 50 or more employees.

Wage laws for specific industries

TheNew Jersey Prevailing Wage Act states the payment of prevailing wage rates for workers on construction projects. It 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.

TheState 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, theWage 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. It 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 employee benefits and compensation laws, 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. The applicant must consent for an employer to do so.

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 any job advertisement that makes current employment a job qualification or indicates that they won’t consider applications from unemployed individuals.

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

State law prohibits employers from requiring current or prospective employees to provide usernames and passwords for their personal social media accounts. Employers can’t force employees to provide access to their 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 can’t make salary history inquiries and salary-related activities, including:

• Screening applicants based on their salary history, which includes prior wages, salaries, or benefits
• 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 an employee voluntarily discloses it.
• Request written authorization from an applicant to confirm salary history after making an offer of employment.

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 can’t influence, request, or require 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:

• The hiring of, or contracting with, any person who works in New Jersey and will receive wages.
• 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

Frequently asked questions