Small Businesses Acting in Good Faith Caught in Booby Traps of NJ Wage Law

Date: February 14, 2020

NFIB, civil justice group, weigh in on Supreme Court Case—ask legislative intent and reason be considered

TRENTON Feb. 14, 2020 – Today, the National Federation of Independent Business (NFIB), a small business association with thousands of members in the state, and the New Jersey Civil Justice Institute filed an amici curiae brief in a case with major implications for well-intended business owners who may face punishment for relying on guidance from government agents in wage and hour disputes. The state Supreme Court is considering whether Cream-O-Land Dairy can assert a “good faith” defense against penalties for allegedly violating New Jersey employment regulations where the company acted in conformance with judgments from state officials who previously concluded—on at least three separate occasions—that the company was in full compliance. The State argues that this good faith defense only applies if the Commissioner of the Department of Labor or the Director of the Wage and Hour Bureau are personally involved; regardless of what their authorized agents may conclude or represent, the Department of Labor says that small business owners may still be liable.

 “Many small businesses operate without HR professionals on staff and certainly without in-house attorneys; they want to do the right thing, but it’s all too easy to make an honest mistake because there are just so many complicated regulations to deal with on a daily basis,” said NFIB’s Senior Staff Attorney, Luke Wake. “That is why it is essential that they be allowed to rely on guidance from authorized DOL officials. This ‘good faith’ defense is intended to promote proper guidance and to better enable small businesses to ensure compliance with New Jersey’s regulatory thicket.”

N.J.S.A. 34:11-56a25.2 (“Section 25.2”) provides a defense against lawsuits and enforcement actions for businesses operating in good faith on legal interpretations and or enforcement policies from the New Jersey Commissioner of Labor. This case asks whether the protection only applies in cases where the Secretary of Labor has personally reviewed and given his blessing to a small business, or when an “authorized” DOL official, acting under his authority, provides guidance.

 “There is no doubt the legislature meant that when any department official, authorized to act in an enforcement capacity tells business owners they are in compliance, their word should be trusted,” said NFIB’s New Jersey State Director, Eileen Kean. “This idea that the Commissioner or the Director must personally sign-off before a business can rely on a DOL interpretation is preposterous. The public rightly places their trust in authorized DOL officials and honest employers should be allowed to place reasonable faith in their determinations without living in fear.”

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