ContentsUnderstand Proper Worker ClassificationUnderstand Wage and Hour ComplianceHealth and Safety RequirementsUnderstand Withholding Taxes and Insurance Requirements for EmployeesProvide Wage Compliance for Public ContractingRegister for Employer AccessWhat Leave Benefits Must New Jersey Employers Provide?
Understand Proper Worker Classification
Business owners who employ workers need to indicate if they are employees or independent contractors.
Per New Jersey Unemployment Compensation Law, commonly referred to as the ABC test, a worker should be considered an employee unless all the following circumstances apply:
- The individual has been and will continue to be free from control or direction over the performance of work performed, both under a contract of service and in fact; and
- The work is either outside the usual course of the business for which such service is performed, or the work is performed outside of all the places of business of the enterprise for which such service is performed; and
- The individual is customarily engaged in an independently established trade, occupation, profession, or business.
Recent Regulations and Resources
Understand Wage and Hour Compliance
The New Jersey Division of Wage and Hour Compliance enforces New Jersey State wage and hour laws regarding minimum wage, earned sick leave, methods of wage payment, child labor, and more.
Minimum Wage & Overtime Wage Rate
The New Jersey State Wage and Hour Law establishes a minimum wage rate and overtime rate for all workers The law requires the payment of time and one half per hour for actual hours worked more than 40 hours, with certain exemptions.
The New Jersey Wage Payment Law and Selected Labor Laws enforce separate benefit packages which the employer has agreed to provide, such as payment of holidays, vacation and personal days, and reimbursement of certain expenses.
The New Jersey Earned Sick Leave Law stipulates the method by which employers are to establish a paid sick leave policy. The law permits employers to create policies that provide additional leave time.
Unpaid or Withheld Wages
The New Jersey State Wage Payment Law stipulates the time, manner, and mode of payment, and prohibits the withholding of wages for illegal deductions, such as breakage, spillage, and cash register shortages.
The New Jersey Child Labor Law and Regulations specify the hours of work for minors, the type of occupations permitted to be performed, and the issuance of proper employment certificates for all minors under 18 years of age.
Construction Industry Independent Contractor Act
The Construction Industry Independent Contractor Act concerns the improper classification of employees as independent contractors in the construction industry.
Mandatory Overtime Restrictions (only applies to healthcare workers)
The New Jersey State Wage and Hour Law stipulates the conditions under which healthcare facilities may require certain hourly employees to work overtime.
The New Jersey Crew Leader Registration Act and Selected Farm Labor Laws require the registration of crew leaders, and outline minimum wage and wage payment standards, and authorize the investigation and site inspection of migrant farm labor camps, drinking water and toilet facilities, contractors, growers, and food processors operating in the State of New Jersey.
The New Jersey Industrial Homework Law and Regulations require the issuing of licenses, permits, and certificates for employers and home-based businesses involved in the manufacturing, altering, finishing, and distribution of certain 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.
The New Jersey State Wage and Hour Law authorizes the employment of individuals with disabilities by charitable organizations or institutions at a rate less than the minimum wage and requires the issuing of special permits detailing the duration, type of work performed, and the payment of commensurate wages.
Employers are required by law to post NJDOL posters where workers can easily see them, and written copies must be distributed to employees.
Employers can request required posters from the Wage and Hour Division free of charge by calling (609) 292-2305 or emailing firstname.lastname@example.org.
Where there is no physical workplace location and where all employees work remotely, the distribution and posting of the poster on a company intranet would be considered good faith efforts toward compliance with the requirement to post the notices in a conspicuous place.
Each required posting has penalties for violations. In some cases, employers who fail to properly display the posters could be charged with a disorderly person's offense and could be fined up to $1,000.
Health and Safety Requirements
New Jersey businesses are required to obtain the appropriate safety licenses in certain industries. The New Jersey Department of Labor and Workforce Development Division for Public Safety and Occupational Safety and Health issues licenses and permits and also offers free and confidential workplace health and safety consultations or training to help employers stay in compliance with the law.
Understand Withholding Taxes and Insurance Requirements for Employees
Family Leave Insurance
The New Jersey Family Leave Act permits leave to be taken for the care of a newly born or adopted child, as long as leave begins within one year of the date the child is born or placed with the employee or, the care of a parent, child under 18, spouse, or civil union partner who has a serious health condition requiring in-patient care, continuing medical treatment or medical supervision. The Family Leave Act considers parents to be: in-laws, step-parents, foster parents, adoptive parents, or others having a parent-child relationship with an employee. Read more about the family leave act.
Temporary Disability Insurance
The Temporary Disability Benefits Law protects against wage loss suffered because of the inability to perform regular job duties due to illness or injury. You, the employer, are required to pay disability insurance taxes and to give the Division of Temporary Disability Insurance certain information about your employees when they file claims for disability benefits. Employers may select coverage under the state plan or a private plan.
Benefits are payable to workers who lose their jobs or who are working less than full-time because of a lack of full-time work and who meet the eligibility requirements. As an employer, you are required to have unemployment insurance. Visit the Division of Unemployment Insurance for specific details.
Most businesses (except for sole proprietorships and single-member LLCs with no employees) need to pay into Worker’s Compensation. Visit the Division of Workers’ Compensation or contact them at 609-292-2515 for more information. For coverage information, contact your insurance provider or the Compensation Rating and Inspection Bureau (CRIB) online or via phone at 973-622-6014.
Health or Life Insurance
Employers are not required under state law to provide health or life insurance. However, it is still highly advised that you do so.
Small businesses interested in obtaining health insurance plans for their employees have several state resources available to determine how to purchase health insurance. The Department of Banking & Insurance has developed a buyer's guide, which explains the basic rules governing the purchase of health coverage by small employers in New Jersey. The Buyer’s Guide includes frequently asked questions along with responses to the questions. The department also offers information on Individual Health Coverage (IHC) and Small Employer Health (SEH).The state's health insurance marketplace is also available to employees searching for health insurance coverage.
Employers with 20 or more employees, who offer health benefits to their employees, must also offer continuation of coverage under federal law, commonly referred to as “COBRA.” State continuation of coverage is available to employees of small business employers (2-19 employees) who are not subject to COBRA. Small business employers must offer employees the option to continue their group health coverage when an employee is terminated, goes to part-time status, or ends employment.
You should consider having employer liability insurance. Other types of insurance you likely want to ask your insurance agent about include: temporary disability, fire, flood, automobile liability, and automobile physical damage and collision.
Provide Wage Compliance for Public Contracting
The New Jersey Prevailing Wage Act stipulates the payment of prevailing wage rates for workers on construction projects that are subsidized by public funds and establishes a fair bidding mechanism for both union and non-union workers.
State Building Service Contracts
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.
Register for Employer Access
Businesses can now use the New Jersey Department of Labor’s Employer Access tool (formerly called TWES) to report employees refusing suitable work, view an account summary, payment history, and any deficiencies, check employer and worker contribution rates, and download an annual contribution rate notice.
What Leave Benefits Must New Jersey Employers Provide?
Most employers must take part in two public insurance programs and deduct payroll taxes for employees working in New Jersey, or provide a private insurance plan.
Temporary Disability Insurance and Family Leave Insurance provide cash benefits to employees to care for themselves or loved ones.
Temporary Disability Insurance
This program provides cash benefits to employees who must stop working due to a physical or mental health condition or other disability unrelated to their work. This includes pregnancy or childbirth recovery.
The federal government is exempt and it is optional for local governments (for example, counties, municipalities, and school districts).
You can choose to require employees to use accrued paid time off before using Temporary Disability benefits. You may not require employees to use leave mandated under the NJ Earned Sick Leave law. Learn more about State requirements for using Disability benefits and paid time off.
Family Leave Insurance
This program provides cash benefits to employees who are unable to work because they need to bond with a new child, care for a family member with a physical or mental health condition, or handle certain matters related to domestic or sexual violence.
Employees may choose to use accrued paid time off before claiming Family Leave benefits, but employers cannot require it. If they choose to use paid time off before claiming Family Leave Insurance benefits, it will not reduce the maximum duration of benefits to which they are entitled.
The law allows employers the option of choosing to establish a private plan for the payment of temporary disability and family leave benefits in place of paying benefits under the State plan. If the employer chooses to go with a private plan, the benefits must be comparable or greater than the State offered benefits.
All private plans must be approved by the Division of Temporary Disability and Family Leave Insurance before they become effective. Private Plan Operations is responsible for the approval process.
Learn more about the requirements for providing private plan insurance to your employees.
- Display Temporary Disability and Family Leave Insurance posters in a workplace location visible to employees
- Provide written notice of Temporary Disability and Family Leave Insurance when an employee is hired, requests information, or notifies an employer of their need for leave
- Report an employee’s quarterly earnings to the State to establish a weekly benefit amount
- Closely monitor all benefits issued to your employees and notify the Division of Temporary Disability and Family Leave Insurance immediately if benefits are being issued incorrectly
- Report the taxable portion of Temporary Disability benefits on your employee's W-2 for the preceding calendar year
How Are Benefits Paid For?
Temporary Disability Insurance: New Jersey workers and employers contribute to the cost of the program. The contribution rate for employers varies from 0.10% to 0.75%.
Family Leave Insurance: Financed 100% by worker payroll deductions. Employers do not contribute to the program.