Senate Bill S 2773

Philip L. Chapman, Esq. Senate Bill S 2773

Philip L. Chapman, Of Counsel
Lum, Drasco & Positan, LLC
103 Eisenhower Parkway
Roseland, NJ 07068

(973) 228-6786 pchapman@lumlaw.com

March 1, 2010

BUSINESSES BEWARE! CHRONIC FAILURE TO OBSERVE THE REQUIREMENTS OF NEW JERSEY’S LAWS RELATING TO WAGES, BENEFITS AND TAXES CAN NOW RESULT IN THE LOSS OF CORPORATE OR LIMITED LIABILITY STATUS AND/OR LOSS OF A BUSINESSE’S LICENSES AND PERMITS

In January 2010 New Jersey enacted Senate Bill 2773, which supplements Title 34 of the Revised Statutes, which governs the organization and functioning of the Department of Labor. The Bill sets forth new administrative actions which can be taken by the DOL’s Commissioner (the “Commissioner”) for repeated knowing violations of “State wage, benefits and tax laws“. Those laws are defined to mean:

                       (1)       P.L. 196, c 173 (C34:11-4-1 et . seq.)
                       (2)        the “New Jersey Prevailing Wage Act”, P.L. 1963, c. 150 (C 34:11-56.25 et. seq.;
                       (3)        the “New Jersey State Wage and Hour Law”, P.L.   1966, c 113, C.34:11-56a et seq.
                       (4)        the workers compensation law, R.S. 34:15-1 et seq.
                       (5)        the “unemployment compensation law, R.S.43::21-1 et seq;
                       (6)        the “Temporary Disability Benefits Law”, P.L. 1948, c 110, C.:43:21-25 et seq.;
                       (7)        P.L. 2008, c17, NJSA 43:21-39.1 et seq
                       (8)        the “New Jersey Gross Income Tax Act”, N.J.S. 54A:1-1 et seq.

The Bill provides that if the Commissioner determines that an employer has knowingly failed for one or more of its employees to maintain and report all records required by State wage, benefit and tax laws and in connection therewith has failed to pay wages, benefits, taxes or other contributions or assessments required by those laws, the Commissioner, as an alternative to, or in addition to, any other actions taken in the enforcement of those laws after affording the employer notice and an opportunity for a hearing, may issue a written determination directing any appropriate agency to suspend any one or more “Licenses” held by the employer for a period of time determined by the Commissioner.

Furthermore, not more than six months after issuance of the Commissioner’s determination, a subsequent audit or inspection is to be conducted; and if the Commissioner determines that the employer or a “successor firm” has continued in its knowing violations, after affording the employer or “successor firm” notice and an opportunity for a hearing, the Commissioner shall issue a written determination directing any appropriate agency to permanently revoke one or more licenses that are necessary for the operation of the employer or successor firm. The Bill establishes certain criteria for a rebuttable presumption that an employer has established a “successor firm”.

The term “Licenses” includes a Certificate of Incorporation, a Certificate of Formation of a Limited Liability Company, a Certificate of Limited Partnership, a Certificate for a foreign corporation or limited liability company qualifying to do business in New Jersey, and any license, certificate, permit or registration including, but not limited to, pursuant to:

            R.S. 48:16-1 et seq.
                        R.S. 48:16-13 et seq. (relating to taxis, auto cabs, jitneys, and limousines
                       The “New Jersey Alcoholic Beverage Control Act, R.S. 33:1-1 et seq.
                       Section 4 of P.L. 2001 (C. 34:8-70)
                        P.L. 1975, c 217 (C 52:27D-130) (required permits for construction or
                        alterations of buildings and other structures
                        Section 14 of P.L. 1981c. 56:8-1.1)
                      “The Public Works Contractor Registration Act”, P.L. 1999 c. 238 (C. 34- 56.48 et seq.

The Bill also requires employers to notify employees of its provisions, prohibits employers from retaliating against employees for making inquiries or complaints regarding possible violations, and provides remedies and penalties for violations.

The passage of the Bill makes it more imperative than ever for a business to confer with its accountant and an attorney concentrating in the areas of state wage, benefits and tax laws to make sure that the business is in compliance.