You must understand New Jersey’s overtime laws if you work within the state. As an employee, you have the right to fair compensation for your time and effort.
This guide will help you understand who qualifies for overtime pay, who is exempt, and what steps to take if you believe you are owed back overtime pay.
Rate and Example
In New Jersey, the standard overtime rate is one and a half times your regular hourly rate. If you usually earn $20 per hour, you calculate your overtime rate to be $30 per hour.
Example: If you worked 50 hours in a week and your regular hourly rate is $20:
Regular pay for 40 hours: 40 × 20 = $800
Overtime pay for 10 hours: 10 × 30 = $300
Total pay for the week: $800 + $300 = $1100
Overtime for Tipped Employees
In New Jersey, tipped employees receive overtime compensation just like other employees. Therefore, the minimum wage is lower than the standard state minimum wage due to using a tip credit.
Understanding Tip Credit
A tip credit allows employers to pay tipped employees a lower base wage, assuming the tips they receive will make up the difference from the standard minimum wage. The tip credit is the difference between the standard state minimum wage and the tipped employee’s base wage.
Example:
New Jersey minimum wage: $15.13 per hour
Minimum tipped employee wage: $5.26 per hour
Tip credit: $15.13 – $5.26 = $9.87
Overtime Calculation for Tipped Employees
Furthermore, when a tipped employee works overtime, their overtime rate is based on the full minimum wage, not the lower base wage.
Formula: Overtime Rate = Standard Minimum Wage × 1.5
Example: If the standard minimum wage is $15.13 per hour:
Overtime rate: $15.13 × 1.5 = $22.70 per hour
Important Notes
Additionally, employers cannot take a higher tip credit for overtime hours than regular hours.
The overtime pay calculation must be based on the full minimum wage to ensure that tipped employees receive fair compensation for their overtime work.
Salaried Employees
Non-exempt salaried employees in New Jersey must calculate their regular hourly rate by dividing their salary by the number of hours that salary covers. Therefore, the regular rate is then used to determine their overtime pay.
Fluctuating Workweek Method (FWW)
Non-exempt salaried employees might qualify for overtime pay under the Fluctuating Workweek Method (FWW). However, this method is for employees who receive a fixed salary but work varying hours each week. Under FWW, employees earn an overtime premium of one-half their regular hourly rate for hours worked over 40 in a week.
Calculating Overtime for Salaried Employees
Salary Covers Less Than 40 Hours per Week:
Apply the regular rate to each hour worked up to 40 hours in a week.
After 40 hours, apply the overtime rate of time-and-a-half.
Salary Covers Exactly 40 Hours per Week:
Compensate any hours worked over 40 in a week at the overtime rate of time-and-a-half.
Who is Entitled to Overtime Pay?
Moreover, most hourly workers in New Jersey qualify for overtime pay when they work more than 40 hours in a week. Employees entitled to overtime pay in New Jersey include:
Non-exempt employees
Also, workers in industries such as retail, hospitality, healthcare, and manufacturing
Who is Exempt?
Certain employees are exempt from receiving overtime pay under New Jersey law. Exemptions generally apply to:
Executive, administrative, and professional employees who meet specific criteria
Certain commissioned sales employees
Some computer professionals
Highly compensated employees performing office or non-manual work
Employment Tests to Determine Exemption
Several tests determine if an employee is exempt from overtime based on their job duties and salary.
For example:
Executive Exemption Test:
Primary duty is managing the enterprise or a recognized department or subdivision
Regularly directs the work of at least two full-time employees
Has authority to hire or fire other employees
Administrative Exemption Test:
Primary duty is office or non-manual work related to management or general business operations
Exercises discretion and independent judgment on significant matters
Professional Exemption Test:
Primary duty is work requiring advanced knowledge in a field of science or learning
Knowledge is customarily acquired by a prolonged course of specialized intellectual instruction
Salaried Employees
Not all salaried employees are exempt from overtime pay. To be considered exempt, salaried employees must meet specific criteria outlined in the exemption tests mentioned above. If salaried employees do not meet these criteria, they are entitled to overtime pay for any hours worked over 40 a week.
Refusing to Work Overtime
In fact, in New Jersey, employers can generally require employees to work overtime as a condition of employment. The New Jersey State Wage and Hour Law (NJSWHL) permits this practice, consistent with the Fair Labor Standards Act (FLSA), which allows employers to terminate an employee who refuses to work overtime.
Exception for Healthcare Facility Employees:
Moreover, employees in healthcare facilities cannot be forced to work excessive hours unless they have voluntarily agreed to do so.
Employers cannot dismiss, terminate, or take disciplinary action against healthcare facility employees who refuse to work overtime.
Steps to Take if You Believe You Are Owed Overtime Pay
If you believe your employer owes you back overtime pay, follow these steps:
Document Your Hours: Keep a detailed record of the hours you have worked, including overtime.
Review Your Pay: Compare your documented hours with your pay stubs to identify discrepancies.
Speak with Your Employer: Address the issue with your employer or HR department first to resolve it internally.
File a Complaint: If the issue remains unresolved, file a complaint with the New Jersey Department of Labor and Workforce Development.
Statute of Limitations
In New Jersey, the statute of limitations for filing a claim for unpaid overtime is two years from the date the overtime wages were due. For willful violations, the statute of limitations extends to three years.
By understanding your rights and taking the necessary steps, you can ensure fair compensation for your work. If you have doubts or require legal assistance, consult an employment law attorney to navigate the complexities of overtime laws in New Jersey.
Do You Have a Case? Get Assistance
Has your employer violated overtime laws and owes you back pay? Don’t wait to take action. Lemberg Law is here to help. Our experienced legal team offers a free evaluation of your case. Call us today at 475-277-2200 or complete our online form to get started. Let us fight for the compensation you deserve.
About the Author:
Sergei Lemberg is an attorney focusing on consumer law, class actions related to automotive issues, and personal injury litigation. With nearly two decades of experience, his areas of practice include Lemon Law (vehicle defects), Debt Collection Harassment, TCPA (illegal robocalls and texts), Fair Credit Reporting Act, Overtime claims, Personal Injury cases, and Class Actions. He has consistently been recognized as the nation's "most active consumer attorney." In 2020, Mr. Lemberg represented Noah Duguid before the United States Supreme Court in the landmark case Duguid v. Facebook. He is also the author of "Defanging Debt Collectors," a guide that empowers consumers to fight back against debt collectors and prevail, as well as "Lemon Law 101: The Laws That Lemon Dealers Don't Want You to Know."
