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Duane Morris LLP

Forums For Adjudicating Employment Disputes

Disputes may be mediated, arbitrated or litigated in a state or federal court, before a state or federal agency or before private mediators or arbitrators.

The Main Sources Of Employment Law

The main sources of employment law are statutes, regulations and common law. Additionally, employment rights may be governed by principles of contract and ordinances enacted by local government.

National Law And Employees Working For Foreign Companies

Federal law, state common law and state statutes apply to all individuals physically working in the state, regardless of nationality and regardless of the law governing their contract of employment. Additionally, local law, such as municipal ordinances, may apply to employees who work within particular municipalities. In certain narrow instances a national treaty with a foreign government may pre-empt the application of national law. The parties may by contract agree to apply state law in some circumstances.

National Law And Employees Of National Companies Working In Another Jurisdiction

Federal law applies to all employees working in the United States and, in some circumstances, to employees working outside of the United States for U.S.-based companies. In addition, state law applies in most cases when the employee is physically working in the state or when both parties have agreed in writing to the application of a specific state’s laws.

Data privacy

Identity Theft Prevention

Under the New Jersey Identity Theft Prevention Act, individuals and businesses are prohibited from intentionally communicating “personal information” of employees and/or customers to any other person or entity, and are required to destroy, or arrange for the destruction of, any personal information the business no longer needs. Personal information is defined as an individual's first name or first initial and last name linked with any one or more of the following: (1) Social Security number; (2) driver's license number or State identification card number; (3) account number or credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual's financial account; or (4) user name, email address, or any other account holder identifying information, in combination with any password or security question and answer that would permit access to an online account.

All businesses that maintain records that include personal information, such as Social Security numbers, must disclose a breach of such records. Businesses are also subject to various restrictions and prohibitions that relate to, among other things, publishing, printing, transmitting, and/or otherwise sharing Social Security numbers.

Businesses are not, however, prohibited from using Social Security numbers for administrative purposes or for internal verification so long as the Social Security number is not released to unauthorized people in the company.

Social Media Privacy

The New Jersey Social Media Act prohibits employers from requiring or requesting that current or prospective employees provide the employer with the employees’ usernames or passwords, or other means of access, to personal social media accounts. Employers are also prohibited from requiring employees to waive their rights under the Social Media Act as a condition of employment. The Social Media Act does not prohibit employers from accessing social media information about employees that is public domain and does not apply to social media accounts related to the employer’s business. Employers are also not prohibited from accessing social media information to investigate potential violations of the law, employee misconduct, or the improper transfer of confidential information or financial data.

Wiretapping Law

The New Jersey Wiretapping and Electric Surveillance Control Act (“Wiretap Act”) prohibits any person, including employers, from purposefully:

  • intercepting, attempting to intercept, or having another person intercept any wire, electronic or oral communication;
  • disclosing or attempting to disclose to any other person the contents of any wire, electronic or oral communication, or evidence derived therefrom, knowing the information was obtained through the interception of a wire, electronic or oral communication; or
  • using or attempting to use the contents of any wire, electronic or oral communication, or evidence derived therefrom, knowing the information was obtained through the interception of a wire, electronic or oral communication.

Although the Wiretap Act covers all persons, including private employers, the law provides certain exemptions. Such exemptions include devices, such as laptops and cell phones, given to employees by their employers that are used in the normal course of business and telephone calls made in the workplace in the normal course of business.

Legal Requirements As To The Form Of Agreement

There are no legal requirements as to the form of agreements used in the hiring process. While some employers extend written offers of employment, the offer to hire an employee need not be in writing.

Mandatory Requirements
  • Trial Period
  • New Jersey does not require that employers give employees an introductory, trial or probationary period.

  • Hours Of Work
  • Federal and state wage and hour laws require that employees who work more than 40 hours per week must be paid overtime, unless their job classification meets one of the specified statutory exemptions. Employees whose job classifications do not fall within one of the statutory exemptions are classified as “non-exempt” and must be paid overtime at a rate of time and one-half of their hourly rate for all hours worked over 40 in any workweek. The overtime requirement does not apply to “exempt” employees, including executive, administrative, professional, computer, and outside sales employees who earn at least $684 per week and by virtue of their jobs can meet the specific criteria of particular duties tests established by statute for each exemption.

    New Jersey also exempts from the overtime and the minimum wage requirements the following positions: part-time childcare employees who work in the employer’s home; motor vehicle salespersons; and persons employed in a volunteer capacity and receiving only incidental benefits at a county or other agricultural fair by a nonprofit or religious corporation or a nonprofit or religious association which conducts or participates in that fair. The following individuals are exempt from New Jersey overtime requirements: individuals working on a farm; individuals employed in a hotel; limousine and motor-bus drivers; and laborers in the livestock industry.

  • Special Rules For Part-time Work
  • New Jersey does not have special rules for part-time workers. Notably, part-time employees are covered by many of New Jersey’s labor and employment laws, including but not limited to, the Earned Sick Leave law, the New Jersey Family Leave Act (assuming the employee meets the eligibility requirements), and the NJ WARN Act.

  • Earnings
  • There are minimum wage requirements and requirements regarding the timing of wage payments. As of January 2021, the current minimum wage rate in New Jersey is $12.00 per hour. The New Jersey legislature has scheduled a minimum wage hike of $1.00 per hour for the next three years and will re-evaluate the minimum wage in 2025.

    Employers who fail to pay workers the required minimum wage rate or who fail to make timely payments of wages in accordance with the New Jersey Wage Payment Law may be subject to fines and penalties assessed by the Commissioner of Labor.

  • Holidays/Rest Periods
  • New Jersey employers are not required by law to give employees time off for holidays. Many employers voluntarily adopt a written policy outlining eligibility for holiday pay based on criteria set by the employer.

    While rest periods and meal breaks are customary for full-time employees, they are not legally mandated for most professions, except for minors under the age of 18. New Jersey law requires that minor employees be given a 30-minute meal period after five consecutive hours of work. Company policy dictates rest and meal breaks for those over the age of 18, unless a collective bargaining agreement or specific statute governing the profession requires otherwise. Employers can choose whether to provide paid or unpaid meal breaks.

  • Minimum/Maximum Age
  • The minimum age of employment is 14. Minors between 14 and 16 years of age may be employed subject to the New Jersey Child Labor Law and the regulations promulgated thereunder. There is no maximum age of employment mandated by law for employees working in the private sector. A few public sector jobs have a mandatory retirement age.

  • Illness/Disability
  • Earned Sick Leave

    Pursuant to the New Jersey Earned Sick Leave Law, employers of all sizes must provide full-time, part-time, and temporary employees, subject to certain exceptions, with up to 40 hours of earned sick leave per year so they can care for themselves or a loved one. Employers can choose whether to follow an accrual method or employers may allot the full amount of earned sick leave to employees the first day of a “benefit year” (meaning a consecutive 12-month period chosen by the employer). Under the accrual method, employees will accrue earned sick leave from their start date at a rate of one hour for every 30 hours worked up to the 40-hour maximum annually. The employer can implement a waiting period and disallow earned sick leave during the first 120 calendar days of employees’ employment. Earned sick leave shall be payable at the employee’s regular rate of pay.

    Under the accrual method, up to 40 hours of unused earned sick leave can be carried over from one benefit year to the next, unless the employer offers to pay employees for unused, earned sick leave in the final month of the employer’s benefit year. An employee can decline the offer. If an employee chooses to accept payment of unused sick leave, the employee has the option to be paid for 50 percent or 100 percent of the unused, earned sick leave and is only entitled to carry over the difference of the unused, earned sick leave up to a cap of 40 hours.

    Employers who forego the accrual process and instead provide employees with the full complement of earned sick leave on the first day of the benefit year have the option to pay employees in full for the amount of unused, earned sick leave in the final month of the employer’s benefit year or carry forward any unused sick leave to the next benefit year, subject to the 40-hour maximum per year. Employers who exercise either of these options at the end of a benefit year must forgo using the accrual process for earned sick leave during the next benefit year. Employers cannot change the benefit year or alter the method of accrual of earned sick leave in a way that prevents the accrual or use of earned sick leave by an employee.

    Employers are not required to pay employees for any unused, earned sick leave at their time of separation from employment, unless required by employer policy or a collective bargaining agreement.

    Employees can use earned sick leave for the following reasons:

    • To care for, treat, or recover from the employee’s own mental or physical illness, injury or condition, or to obtain preventive medical care;
    • To care for a covered family member during diagnosis or treatment of, care for, or recovery from a mental or physical illness, injury or condition, or to obtain preventive medical care for the family member;
    • For certain absences from work that are necessary due to domestic or sexual violence against the employee or the employee’s covered family member;
    • For time an employee is unable to work due to the closure of the employee’s workplace or a child’s school or place of care because of a public health emergency or a determination that their presence jeopardizes the health of others; or
    • For time needed for an employee to attend a child’s school-related conference or any meeting requested by a school administrator (during the state of emergency caused by COVID-19 pandemic, pursuant to Senate Bill 2304, New Jersey employees can also use earned sick leave for reasons that largely track the federal Families First Coronavirus Response Act (“FFCRA”)).

    Employers can require employees to provide seven days’ advanced notice of the need for earned sick leave, where the need for leave is foreseeable. Otherwise, notice must be provided as soon as practicable.

    Employers must provide notice to employees of their rights under the Earned Sick Leave Law in the form issued by the Commissioner of the New Jersey Department of Labor and Workforce Development. This includes conspicuously posting the notice in the workplace and providing written notice to employees at the time of hire and upon request.

    Employers must maintain records of all hours worked by employees and earned sick leave used by employees for at least five years. If an employee makes a claim under the Earned Sick Leave Law and the employer fails to maintain or retain adequate records, there is rebuttable presumption that the employer violated the law.

    An employee’s use of earned sick leave for any of the reasons stated above is considered “protected leave,” and employers are prohibited from retaliating against an individual for taking protected leave, meaning the employee cannot be subject to discipline to using earned sick leave and cannot have an absence properly designated as earned sick leave counted as a violation of the employer’s attendance policy. Employers are permitted to take disciplinary action against any employee who uses earned sick leave for purposes other than those permitted by the Earned Sick Leave Law.

    Other Leave During Periods of Illness/Disability

    New Jersey employees with a serious health condition may be eligible for a leave of absence under federal law, the Family and Medical Leave Act (“FMLA”), depending the criteria established thereunder for eligibility and employer size. New Jersey employees who miss time from work due to their own disability may be eligible for paid disability benefits under the state plan in accordance with New Jersey’s Temporary Disability Benefits Law, unless their employer has a private plan that offers benefits the same as or better than the state plan. Both federal and state law require employers to provide reasonable accommodation to employees with a disability, which could include allowing additional leave time, unless doing so would pose an undue hardship on the employer.

    Employees who are caring for a family member with a serious medical condition may be eligible for leave rights pursuant to the FMLA and the New Jersey Family Leave Act (“NJFLA”). Employees who miss time from work to care for a family member with a serious health condition as defined by the FMLA and NJFLA may seek up to twelve (12) weeks of family leave insurance benefits from the state, pursuant to the New Jersey Family Leave Insurance Program.

  • Location Of Work/Mobility
  • New Jersey law does not impose requirements regarding the location of work. The employee’s location of work and mobility can be decided and changed by the employer.

  • Pension Plans
  • Federal law governs pension plans. Employers may or may not contribute to pension plans on behalf of employees, depending upon the terms of the pension plan.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • Pregnancy and breastfeeding status are afforded protection under the LAD. It is unlawful for an employer to discriminate against an employee because of pregnancy or breastfeeding status with respect to terms and conditions of employment, refuse to hire an applicant because of pregnancy or breastfeeding status or discharge an employee because of pregnancy or breastfeeding status.

    Employers are required to make reasonable accommodations available for employees affected by pregnancy (which is defined to include pregnancy, childbirth or medical conditions related to pregnancy or childbirth) and for employees who are breastfeeding when such employees request an accommodation based on the advice of their physicians.

    Employers are not required to provide accommodations if doing so would be an undue hardship on the business operations of the employer. It is unlawful for an employer to penalize a pregnant employee who requests, or receives and uses, an accommodation.

    The FMLA (federal law) allows for twelve (12) weeks of unpaid leave to eligible employees for the birth or adoption of a child. The NJFLA also provides for such leave. To be eligible for leave under the NJFLA, an employee must be employed in New Jersey by a covered employer (an employer with 30 or more employees anywhere worldwide). The employee also must have been employed for at least twelve (12) months with the employer and must have worked 1,000 base hours in the preceding twelve (12) months.

    The New Jersey Family Leave Insurance Law provides paid benefits for up to twelve (12) weeks to those employees who are not eligible for paid leave under a private plan offered by their employer, subject to certain restrictions and limitations.

  • Compulsory Terms
  • There are no compulsory terms required.

  • Non-Compulsory Terms
  • The parties are free to agree to other non- compulsory provisions.

Types Of Agreement

Employers can agree to employ an employee for a defined duration of time, in which case a written employment agreement is advisable. Employee handbooks can give rise to an implied agreement, unless the handbook contains the proper disclaimer under New Jersey law. In the absence of a written or implied contract, most New Jersey employees are employees at-will, which means that the employee or the employer can terminate the employment relationship at any time for any reason, so long as the reason is not unlawful (i.e., discriminatory or retaliatory in response to the exercise of protected rights). Where employees are in a union, the collective bargaining agreement governs the terms and conditions of their employment, subject to the terms of applicable benefit plan documents.


Employers can require employees to sign nondisclosure agreements to protect the secrecy/confidentiality of confidential or proprietary information. Even in the absence of a nondisclosure or other agreement affording such protection, employers’ trade secret information is afforded protection under common law and statute, specifically, the New Jersey Trade Secrets Act.

However, the LAD prohibits nondisclosure provisions in employment contracts and settlement agreements that have “the purpose or effect of concealing the details relating to a claim of discrimination, retaliation or harassment.” Settlement agreements resolving employee discrimination, retaliation or harassment claims must include a “bold, prominently placed notice” that states the following: “Although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.”

Ownership of Inventions/Other Intellectual Property (IP) Rights

The Employee Rights to Ownership of Inventions Law prohibits employment contracts that require the assignment of any and all employee inventions developed entirely on the employee’s own time and without using the employer’s resources. The prohibition does not apply to inventions that: (a) relate to the employer’s business or actual or demonstrably anticipated research or development; or (b) result from any work performed by the employee on behalf of the employer.

Pre-Employment Considerations

Salary History Inquiries

Under the New Jersey Salary History Ban Law, private employers are prohibited from inquiring about a job applicant’s salary history, benefits and other compensation during the hiring process. Employers are also prohibited from considering salary history information that is inadvertently disclosed during backgrounds checks. However, employers can consider and/or verify salary history information under certain circumstances, such as: (1) if the applicant volunteers the information without prompting; (2) once an offer of employment that includes an explanation of compensation has already been made; (3) if the salary history information is being used for the purposes of an internal promotion or transfer, or if the employee previously worked at the employer; (4) if federal law requires disclosure of salary history information; (5) to inquire about the terms and conditions of prior incentive or commission plans, subject to certain restrictions; and (6) to communicate with applicants about wage or salary rates governed by collective bargaining agreements or civil service laws.

Criminal History Inquiries

Under the Opportunity to Compete Act (known informally as the “Ban the Box” law), employers with 15 or more employees who do business, employ people or take applications for employment in New Jersey, are prohibited from: (1) posting job advertisements indicating that persons who have been arrested or convicted of a crime will not be considered for employment; and (2) requiring applicants to complete a job application that requires disclosure of their criminal history. Employers may run a criminal background check on an applicant or inquire about an applicant’s criminal record after the first interview or, as is common practice, after a conditional offer of employment has been extended to the applicant. Under no circumstances can an employer consider a criminal record that has been expunged or erased through executive pardon.

The New Jersey Decriminalization Law similarly prohibits employers from requiring disclosure of a prospective employee’s history of cannabis-related criminal offenses or making any employment decision “solely” because of such criminal history. There is a limited statutory exception to this prohibition for jobs in “law enforcement, corrections, the judiciary, homeland security, or emergency management.”

Credit Inquiries

The New Jersey Fair Credit Reporting Act (“NJFCRA”), the state law counterpart to the federal law the Fair Credit Reporting Act (“FCRA”) requires employers to provide applicants and/or employees with a summary of their rights under the NJFCRA with respect to consumer reports or investigative consumer reports obtained for employment purposes from a consumer reporting agency. NJFCRA also requires that employers follow certain steps before taking adverse employment action based on information contained in such reports, including providing the applicant or employee with a copy of the report and providing the applicant or employee with a summary of the individual’s rights under NJFCRA and FCRA.

Drug Screening for Cannabis

Employers who conduct pre-employment drug screening must be mindful of the implications of the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) and the Jake Honig Compassionate Use Medical Cannabis Act (CUMCA). Under CREAMMA and CUMCA, employers cannot take adverse employment actions against an employee or applicant solely because that person does (or does not) use marijuana recreationally, or solely because of that person’s status as a medical marijuana user, respectively.

Neither CREAMMA nor CUMCA require employers to accommodate marijuana use in the workplace or to allow employees to be under the influence during working hours. Both laws have specific requirements with respect to drug testing procedures. For example, in the event of a failed drug test, CREAMMA requires employers to use certified “experts” to make decisions relating to the impact of an employee’s use of or impairment from marijuana. CUMCA requires employers to provide an employee or applicant written notice of a positive drug test and the opportunity to provide a legitimate medical reason and/or retake the test. Both CREAMMA and CUMCA contain certain carve outs for federal contractors.

Hiring Non-Nationals

Employers are obliged by federal law to ensure that all employees are eligible to work in the United States.

Hiring Specified Categories Of Individuals

Employers need to be mindful that there are restrictions on the types of work that children can be required to undertake.

Outsourcing And/Or Sub-Contracting/Temporary Agency Work

Employers may outsource work and/or engage the services of subcontractors, unless a collective bargaining agreement restricts such engagements. New Jersey employers cannot refuse to contract with an independent contractor based on the contractor’s membership in a protected class, as such a refusal is prohibited by the LAD. Depending on the factual circumstances, independent contractors may be legally entitled to certain statutory protections afforded to employees. If the workforce is unionized, collective bargaining agreements may contain restrictions on outsourcing and subcontracting.

Changes To The Contract

Employers may make unilateral changes to the terms of the employment relationship, unless the parties have a contract, such as an employment agreement, collective bargaining agreement or some other agreement, that provides that changes may only be made with the consent of both parties.

Change In Ownership Of The Business

The federal Worker Adjustment and Retraining Notification Act (“WARN Act”), requires 60 days’ prior notice in the event of a plant closure or mass layoffs affecting specific numbers of employees.

New Jersey has a similar, but more employee-friendly law, the Millville Dallas Airmotive Plant Job Loss Notification Act (commonly referred to as “NJ WARN Act”). The NJ WARN Act currently requires employers to provide 60 days’ prior notice in the event of a mass layoff, termination of operations, or transfer of operations. However, the NJ WARN Act was amended in January 2020, to require 90 days’ notice in the event of a mass layoff, transfer of operations or termination of operations, and to mandate payment of severance to affected employees in the amount of one week for each full year of employment. The NJ WARN Act was also amended to cover employers with 100 or more employees, regardless of whether the employees are full-time or part-time. These amendments were suspended in April 2020 due to the COVID-19 pandemic, but will become effective 90 days following the termination of the state of emergency declaration in New Jersey.

The NJ WARN Act can be triggered by a mass layoff, or a transfer or termination of operations. Once the amendments become effective, a “mass layoff” will be defined as a termination of 50 employees within New Jersey, during any 30-day period, regardless of the employees’ hours, tenure, or specific work location within the state. Currently, a mass layoff must result in the termination of 500 employees at the “establishment” or 50 employees representing at least 33 percent of the total workforce of the “establishment.” An “establishment” under the current definition is “a single location or a group of contiguous locations, including groups of facilities which form an office or industrial park or separate facilities just across the street from each other.”

Social Security Contributions

The employer and employee must make compulsory Social Security contributions to the federal government. Employers and employees must contribute a percentage of wages in accordance with federal law.

Accidents At Work

Federal law requires employers to keep logs of all accidents at work. State law requires employers to maintain insurance to provide compensation for workplace injuries. The New Jersey Workers’ Compensation Act mandates that employers must purchase workers’ compensation insurance, at no cost to the employees, to provide injured workers with monetary benefits, medical care and rehabilitation services. Most employees will be deemed to have waived their common law right to sue their employers or coworkers in tort for workplace injuries, absent certain exceptional circumstances.

Discipline And Grievance

New Jersey has no state rules governing discipline and grievance procedures in the private sector. Unless a collective bargaining agreement or a specific contractual provision provides otherwise, discipline and grievance procedures are within the employer’s discretion and are frequently set forth in employee handbooks.

Harassment/Discrimination/Equal pay

Federal and state laws prohibit discrimination in the workplace and recognize harassment as a form of discrimination. Under the LAD, New Jersey employees are protected from discrimination on the basis of race, hair texture, hair type and protected hairstyles historically associated with race, creed, color, national origin, nationality, ancestry, age, sex, pregnancy, breastfeeding status, familial status, marital status, domestic partnership status, civil union status, affectional or sexual orientation, gender identity or expression, atypical hereditary cellular or blood trait, genetic information, liability for military service, status as a smoker or non-smoker, and mental or physical disability. The LAD prohibits discrimination based on the employee’s actual or perceived membership in any protected class. In certain circumstances, employees may be afforded protection under the LAD based on their association with a member of a protected group.

The concept of equal pay is recognized by federal and state legislation. Under the New Jersey Diane B. Allen Equal Pay Act (“NJ EPA”), it is an unlawful employment practice to pay an employee who is a member of any protected class under the LAD less compensation and benefits than employees outside the protected class for “substantially similar” work, unless the employer can demonstrate a recognized justification for the pay differential, such as, a seniority system, merit system, or legitimate bona fide factors (e.g. training, education, experience, etc.). “Substantially similar” work will be determined by a “composite of skill, effort and responsibility.”

The NJ EPA prohibits retaliation against employees who make inquiries relating to compensation and/or complain of compensation disparities. Claims brought under the EPA are subject to a six-year statute of limitations. An employer who violates the pay equity or anti-retaliation provisions of the NJ EPA will have exposure for treble damages (“three times any monetary damages”), in addition to the other remedies available under the LAD, including compensatory damages, both economic and noneconomic, punitive damages, equitable relief, attorneys’ fees, and costs and penalties.

There are specific reporting requirements under the NJ EPA for employers who contract with the state or any other public body to provide services.

Compulsory Training Obligations

There are no compulsory training obligations, but employers are advised to provide anti-harassment, anti-discrimination and anti-retaliation training. Safety training is also advisable in certain industries.

Offsetting Earnings

State law governs permissible deductions from employee earnings. Offsets to employee earnings may not result in a payment of less than the hourly minimum wage for hours worked. The New Jersey Wage Payment Law specifies the permitted deductions/offsets to earnings. Under New Jersey’s Wage Theft Law, employers and individuals can face both civil and criminal liability for failing to pay wages when due.

Payments For Maternity And Disability Leave

Employers may offer paid parental or disability leave pursuant to a private plan, but are not required to do so, unless the leave would qualify as paid leave under the Earned Sick Leave law as described above. In the event an employer does not offer benefits under a private plan, employees may be eligible for paid state leave benefits. Pregnant employees who are disabled during their pregnancy can apply for disability benefits under the New Jersey Temporary Disability Benefits Law.

After the birth or adoption of a child, eligible employees can apply for twelve (12) weeks of paid leave benefits under New Jersey’s Family Leave Insurance Program, subject to certain limitations.

Compulsory Insurance

There are compulsory insurance requirements under state law for workers’ compensation (for work-related injuries and illnesses) and unemployment benefits. Additionally, under federal law, the Patient Protection and Affordable Care Act (“ACA”) and the Health Care and Education Reconciliation Act, require employers with 50 or more full-time equivalent employees to provide health insurance coverage to full-time employees. Employers who fail to provide such coverage may face a $2,700 penalty per employee. Employers may also be subject to a $4,060 penalty if the coverage offered by the employer is “unaffordable” or does not meet certain minimum standards required by law.

Absence For Military Or Public Service Duties

In addition to leave provided for by the federal Uniformed Services Employment and Reemployment Rights Act (“USERRA”), New Jersey’s Military Leave Law provides reemployment rights to individuals who successfully return from military service, remain qualified for their former positions, and apply for reemployment within 90 days after their service ends. Employers must restore such persons to their former jobs, or to a position of like seniority, status and pay, unless the employer’s circumstances have changed.

Additionally, employees may be eligible for leave under the FMLA when the employee’s spouse, son, daughter or parent — who is a “covered military member” — is on active duty or call-to-active-duty status and there is a “qualifying exigency.” Employees may also be eligible for “military caregiver leave” under the FMLA, which is also known as “leave to care for a covered service member.”

State law requires that employers allow unpaid time for jury service and prohibits retaliation against employees for jury duty service. Some employers allow for paid time off for jury service as a matter of policy. The court system typically pays jurors a very modest daily stipend for their service.

Works Councils or Trade Unions

Under federal law employees can force the employer to recognize a union by demonstrating that a majority of similarly-situated employees support a union, usually by an election. Individuals who are involved in activities to promote a union are protected from being subjected to adverse employment actions, such as dismissal, because of their activities in that role.

Employees’ Right To Strike

Under federal law groups of employees may strike, even if there is not a collective bargaining agreement or formal union at the site of employment, subject to limits for employees who provide public services.

Employees On Strike

Typically, employees on strike cannot be fired unless the employees engage in serious misconduct while on strike or the strike was unlawful and unprotected. However, if employees are on an economic strike, they may be permanently replaced by the employer and may be denied reinstatement if there are no open positions available at the end of the strike.

Employers’ Responsibility For Actions Of Their Employees

Employers are responsible under agency principles for acts of employees within the scope of their employment or conducted with the apparent authority of the employer. Employers are not responsible for employees’ actions outside the scope of their employment.

Procedures For Terminating the Agreement

Unless specified in a collective bargaining agreement or contract of employment, there are no procedures required for terminating an employee’s employment. Following termination, employers are required to pay an employee’s earned wages in the payroll cycle immediately following the date of the employee’s separation of employment. Employers should also pay employees any accrued, but unused, paid time in that same payroll cycle, only if pursuant to an agreement, company policy or practice.

Instant Dismissal

Employment relationships are typically deemed to be “at-will” unless there is an express or implied promise by the employer that alters the “at-will” relationship. An “at-will” employment relationship can be terminated by the employer or the employee at any time, as long as the employer is not terminating the employee’s employment for an unlawful reason (i.e., a discriminatory or retaliatory reason). A collective bargaining agreement or an employment contract can alter the “at-will” nature of the employment relationship.

Employee's Resignation

At-will employees are free to resign at any time. For employees with employment contracts, the notice requirements delineated in the contract should be followed.

Termination On Notice

Notice is not typically required for termination, unless specifically required by a written contract, the federal WARN Act, or the NJ WARN Act.

Termination By Reason Of The Employee's Age

Generally, employment cannot be terminated because of the employee’s age.

Automatic Termination In Cases Of Force Majeure

In rare circumstances, an employment agreement can be terminated automatically because of force majeure.

Collective Dismissals

As explained above, employers with 100 or more employees that conduct a mass layoff, or a transfer or termination of operations may be subject to the NJ WARN Act, depending on how many employees will be affected by the layoffs and/or transfer or termination of operations.

Termination By Parties’ Agreement

The parties are entirely free to agree to terminate on any grounds they desire except for discriminatory, retaliatory or any other unlawful reasons prohibited by federal and state law.

Directors Or Other Senior Officers

There are no special rules for firing directors or other senior officers, unless an employment agreement and/or contract dictates otherwise. In the case of a director, termination of employment does not always end the director’s board membership.

Special Rules For Categories Of Employee

There are no special rules requiring certain categorizing of employees. However, federal and state wage and hour laws classify employees as exempt or non-exempt from overtime pay for hours worked over 40 based on certain statutory exemptions and criteria.

Specific Rules For Companies in Financial Difficulties

The federal WARN Act requires that 60 days’ prior notice be given to employees in the event of a plant closing or a mass layoff which affects a specific number of employees, unless the layoffs result from closure of a faltering company or unforeseeable business circumstances. As explained above, the NJ WARN Act currently requires 60 days’ notice, but will require 90 days’ notice in the event of a mass layoff, transfer of operations or termination of operations when the state of emergency due to COVID-19 is lifted.

Restricting Future Activities

Employers and employees are free to contractually agree to restrict future activities (except for those related to the practice of law). In evaluating the enforceability of such post-employment restrictions, courts will review the nature and scope of the restrictions to ensure that they are reasonable and supported by consideration (entered into at the inception of employment or through continued employment). New Jersey courts will consider the scope and duration of the restrictions on a case-by-case basis to determine whether they are reasonable and thereby enforceable. New Jersey does subscribe to the blue pencil doctrine, which enables the court in its discretion to rewrite an unreasonable post-employment restriction so that it is reasonable.

Whistleblower Laws

New Jersey has a state whistleblower law, the Conscientious Employee Protection Act (“CEPA”). CEPA prohibits employers from taking any retaliatory action against an employee because that employee:

  • discloses, or threatens to disclose, to a supervisor or to a public body an activity, policy or practice of the employer or another employer, with whom there is a business relationship, that the employee reasonably believes is in violation of a law, or a rule or regulation issued under the law, or, in the case of an employee who is a licensed or certified health care professional, reasonably believes constitutes improper quality of patient care;
  • provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any violation of law, or a rule or regulation issued under the law by the employer or another employer, with whom there is a business relationship, or, in the case of an employee who is a licensed or certified health care professional, provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into quality of patient care; or
  • provides information involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity;
  • provides information regarding any perceived criminal or fraudulent activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity; or
  • objects to, or refuses to participate in, any activity, policy or practice which the employee reasonably believes: (1) is in violation of a law, or a rule or regulation issued under the law or, if the employee is a licensed or certified health care professional, constitutes improper quality of patient care; (2) is fraudulent or criminal; or (3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment.

An employee must generally notify the employer of the employee’s concerns and give the employer an opportunity to correct the activity, policy, or practice. However, employees are not required to provide notice, if doing so would result in physical harm or if the situation is an emergency.

CEPA requires that employers with 10 or more employees distribute a notice of employees’ rights under CEPA on an annual basis, in both English and Spanish, or the language spoken by the majority of the employees.

Special Rules For Garden Leave

New Jersey does not have special rules for garden leave. Any contracts and/or agreements between the employer and the employee would control.

Severance Payments

Employers are not required to provide severance pay to separated employees, unless the employer has a severance policy, the employee has a written contract providing for severance pay, or the obligation is triggered under the NJ WARN Act. There are specific rules governing the validity of releases given in exchange for severance pay and a statutory prohibition on non-disclosure provisions that have the purpose or effect of concealing the details relating to a claim of discrimination, retaliation or harassment.

Special Tax Provisions And Severance Payments

Severance payments are taxable income to the employee.

Allowances Payable To Employees After Termination

As a general matter, employers are required to pay employees all wages earned in the next payroll cycle following separation of employment. Employers are not required to pay any other special allowances to employees after termination, unless required by contract or the employer has a policy or practice of doing so. Employers may or may not pay employees for accrued paid leave at the time of separation, depending upon practice, policy or contract requirements. Employees may be eligible for unemployment compensation benefits, subject to eligibility requirements and determinations made by the state.

Time Limits For Claims Following Termination

There are time limits for filing claims after termination, and the time limit varies depending on the nature of the claim. For example, discrimination claims brought under the LAD generally must be filed within two years, absent certain circumstances. Defamation claims must be filed within one year. Claims brought under the NJ EPA must be filed within six years. The length of the statute of limitations depends on the nature of the cause of action asserted.

Specific Matters Which Are Important Or Unique To This Jurisdiction

Wage and Hour Enforcement

The New Jersey Wage Theft Law imposes severe civil and criminal consequences on employers who fail to pay wages in accordance with various state laws governing wages owed to New Jersey employees, including the New Jersey Wage and Hour Law, the Wage Payment Law and the NJ EPA.

Protected Leave for Domestic Violence and Sexual Assault

The New Jersey Security and Financial Empowerment Act, commonly known as the “NJ SAFE Act,” allows eligible employees to take 20 days of unpaid leave during a 12-month period in the event the employee or the employee’s child, parent, spouse, domestic partner or civil union partner is a victim of domestic violence or sexual assault. This law applies to New Jersey employers with 25 or more employees.

To be eligible for leave under the NJ SAFE Act, an employee must work for the employer for at least twelve (12) months and have worked 1,000 hours or more during the preceding 12-month period. Eligible employees can use paid leave under the Earned Sick Leave Law for leave pursuant to the NJ SAFE Act. The purpose of the NJ SAFE Act is to allow victims and family members providing care to victims, leave to seek professional medical and/or psychological treatment, to obtain help from a victim services program, to relocate, and/or to seek legal assistance and recourse, without fear of reprisal.

If the need for leave under the NJ SAFE Act is foreseeable, employees are required to give written notice to the employer as far in advance as is reasonable and practical under the circumstances. Employers may request documentation supporting the need for leave.

Employers are required to display a conspicuous notice of employees’ rights under the NJ SAFE Act in a form prescribed by the Commissioner of Labor and Workforce Development and use other appropriate means to inform employees of such rights.

The NJ SAFE Act prohibits retaliation against employees for the exercise of rights granted by the Act.

Poster Requirements

Employers with New Jersey operations and/or employees working in New Jersey are required to post and distribute certain notices at the time of hire and periodically thereafter. Employers can access such notices via the following link:

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Contact a Contributing Author:
Kathleen O’Malley
Duane Morris LLP
United States

Danielle M. Dwyer
Duane Morris LLP
United States


© 2021, Duane Morris LLP. All rights reserved by Duane Morris LLP as author and the owner of the copyright in this chapter. Duane Morris LLP has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021