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On July 19, 2010, in Jackson v. Alpharma Inc., the United States District Court for the District of New Jersey held that Alpharma, Inc.’s pharmaceutical sales representatives qualify as exempt administrative employees under the Fair Labor Standards Act (“FLSA”). The court’s unpublished opinion relies in part on the Third Circuit’s holding in Smith v. Johnson & Johnson, 593 F.3d 280 (3d Cir. 2010).
Back in April, we reported that the Division of Wage and Hour Compliance at the New Jersey Department of Labor and Workforce Development was reconsidering its prior enforcement policy rejecting federal “rounding” rules under New Jersey law. On July 6, the Department formally announced its proposal to adopt a new rule which would adopt, verbatim, the federal regulation regarding the use of time clocks and rounding practices. The Department explained that
“[The proposed new rule would] eliminate any possible confusion regarding the Department’s wage and hour enforcement policy relative to the use of time clocks and ‘rounding’ practices.”
Specifically, the proposed rule will bring New Jersey back into conformity with federal law, creating a “straight forward and simple approach” for employers in New Jersey.
A public hearing on the proposed new rule will be held on July 29, 2010, at the office of the New Jersey Department of Labor and Workforce Development in Trenton, New Jersey.
This entry was written by Robert W. Pritchard.
As we reported last year, the Division of Wage and Hour Compliance at the New Jersey Department of Labor and Workforce Development rejected federal “rounding” rules for enforcement purposes under New Jersey law. Specifically, while the U.S. Department of Labor assesses the impact of rounding “over a period of time” (and allows rounding practices that “average out” over time), the Division announced that it would evaluate the impact of rounding on a week-to-week basis. According to the Division, if an employer rounds, it must be to the benefit of the employee each week in order to comply with New Jersey law.
Several new wage and hour bills made it through various state legislatures during the second half of the year. Below is a wrap up of some new developments (including regulatory updates) from July 1st through December 31st. Click here to read our post on changes to state minimum wages.
Effective September 21, 2009, the New Jersey Department of Labor and Workforce Development, Division of Wage and Hour Compliance, adopted a new rule allowing employers to make payroll deductions for health club membership fees or for child care services if payment is authorized in writing by an employee or pursuant to a collective bargaining agreement and approved by the employer. In promulgating this new rule, the Department of Labor amended New Jersey Administrative Code § 12:55-2.1, which sets forth the very limited circumstances in which an employer may make a payroll deduction.
The federal minimum wage is set to increase to $7.25 on July 24, 2009. Additionally, 23 states will also increase the minimum wage for employers subject to state wage and hour laws. The majority of these increases take effect on July 24, 2009, but three states raise their minimum wage effective July 1, 2009.
In addition to noting the wage increase, employers should ensure that they are properly displaying a copy of the state’s current minimum wage poster in a conspicuous location in the workplace that notes the wage increase, even if the increase will not affect hourly employees at any particular workplace.
The following states have increased their state minimum wage:
Delaware
• $7.25/hr. effective 7/24/09
District of Columbia
• $8.25/hr. effective 7/24/09
Federal
• $7.25/hr. effective 7/24/09
Florida
• $7.25/hr. effective 7/24/2009
Idaho
• $7.25/hr. effective 7/24/09
Illinois
• $8.00/hr. effective 7/1/09
Indiana
• $7.25/hr. effective 7/24/09
Kentucky
• $7.25/hr. effective 7/1/09
Maryland
• $7.25/hr. effective 7/24/09
Missouri
• $7.25/hr. effective 7/24/09
Montana
• $7.25/hr. effective 7/24/09
Nebraska
• $7.25/hr. effective 7/24/09
Nevada
• If health benefits are available:
Effective 7/1/09 $6.55/hr (employers subject to the FLSA should see federal requirements)
• If the employer does not provide qualified health benefits:
Effective 7/1/09 $7.55/hr
New Jersey
• $7.25/hr. effective 7/24/09
New York
• $7.25/hr. effective 7/24/2009
North Carolina
• $7.25/hr. effective 7/24/09
North Dakota
• $7.25/hr. effective 7/24/09
Oklahoma
• $7.25/hr. effective 7/24/09
Pennsylvania
• $7.25/hr. (large employers) effective 7/24/09
• $7.25/hr. (small employers) effective 7/24/09
South Dakota
• $7.25/hr. effective 7/24/09
Texas
• $7.25/hr. effective 7/24/09
Utah
• $7.25/hr. effective 7/24/09
Virginia
• $7.25/hr. effective 7/24/09
Wisconsin
• $7.25/hr effective 7/24/09
Many employers record their employees’ starting time and stopping time to the nearest five minutes, or to the nearest tenth or quarter of an hour. For more than 40 years, the U.S. Department of Labor has adhered to its stated enforcement policy that such a “rounding” practice is acceptable “provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” 29 C.F.R. § 785.48(b). The Department of Labor requires only that this arrangement “averages out” over time so that employees are fully compensated for all the time they actually work.
Recently, the Division of Wage and Hour Compliance at the New Jersey Department of Labor and Workforce Development has taken the position that it “does not accept the ‘rounding’ policy” of the U.S. Department of Labor for enforcement purposes under New Jersey law. The Division has taken the position that “if an employer does round off to an increment or a fraction of an hour, it must be to the benefit of the employee.”
While it has been reported that the Division’s position represents a change in its enforcement policy, the Division insists that “this has been the enforcement policy [of the Division] since the New Jersey Wage Payment Law was passed in 1965.”
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