Summary of New Jersey Protection for Remote Employees

With many employers allowing their workers to work remotely, either full or part-time, the rules that apply to those remote employees are important for any employer to know. In New Jersey, two New Jersey laws, the New Jersey Law Against Discrimination (NJLAD) and the New Jersey Wage Payment Law (NJWPL), were both established to protect employees. As their names suggest, the NJLAD protects employees against discrimination, and the NJWPL provides employees with certain wage payment protections. Both are “remedial” in nature and “liberally construed” in favor of employees. However, they apply differently to employees who live and work outside of New Jersey, so remote employees outside of the State may be subject to different laws than in-state workers.

The NJLAD protects employees employed by New Jersey companies, even if the employee is not working in New Jersey. In Calabotta v. Phibro Animal Health Corp., 460 N.J. Super. 38 (App. Div. 2019), the Appellate Division, after examining the NJLAD’s text and extensive legislative history, concluded that “we detect no expression of legislative intent to limit the statute’s protections to job applicants who live in New Jersey, or to those employees who perform all of their employment functions in New Jersey.” So, it does appear that the NJLAD may provide protection to employees of New Jersey-based employers, or employees assigned to a New Jersey location, even if the employees live and work outside of New Jersey.

To determine whether the NJLAD applies, Calabotta set forth the following test: First, a court must determine whether there is a conflict of laws between the law of the forum state and the laws of any other interested states. If no conflict exists, the court applies the laws of the state where the court is located. Second, if a conflict does exist, courts apply “the most significant relationship” test to determine which state’s law applies. For example, in Calabotta, the NJLAD applied to the Illinois employee’s failure to promote claim, since the employer was located in New Jersey, and the position the employee sought would have been located in New Jersey. However, the Appellate Division remanded to the trial court to determine whether the Illinois employee’s wrongful termination was more significantly tied to Illinois, the place of the injury, or the corporation, where the decision to terminate him may have occurred.

Conversely, the NJWPL applies based on where the employee is located, not the employer. As such, the NJWPL protects employees who work in New Jersey for an employer in another state, but does not protect employees whose employer is based in New Jersey, but work in another state. Employers who wish to avoid some of the more restrictive provisions of New Jersey wage and hour laws may actually have an incentive to have their hybrid employees work exclusively from home, if they live in a state with less protective wage and hour laws.

Therefore, it is important for employers to know where their remote employees are living. With many employees still out of the office, employers must be extra diligent to ensure they are following Federal and New Jersey law, as well as the state law where its employees are working.

If you have questions, or would like more information about the New Jersey Law Against Discrimination (NJLAD) or the New Jersey Wage Payment Law (NJWPL), please contact Scott Sears at 201-753-7002 or ssears@archerlaw.com.