In 2019, the New Jersey Legislature beefed up the wage-hour law by expanding the statute of limitations from two years to six years and implementing a liquidated damages provision, by which wages due could be doubled or tripled. Since the effective date of this law, August 6, 2019, every time I deal with a plaintiff’s lawyer, they tell me that the law is “retroactive” and the six years automatically applied. Every time I tell them no, based on decisions by federal courts in New Jersey that have rejected those contentions and I deal with them on that basis. Well, for the moment, they have the (next to) last laugh, as the Appellate Division in March 2023 ruled that the six-year limitations period applies when a case is filed. That case was Maia v IEW Construction and issued from the NJ Appellate Division,
Well, the New Jersey Supreme Court has now accepted this case for decision and will decide whether the six-year limitations period is retroactive as concerns the NJ Wage Hour Law and the NJ Wage Payment Law. The case taken concerns a class action lawsuit that was filed following the August 2019 date, but which alleges conduct violative of wage hour laws that took place prior to that date.
Several federal courts in New Jersey had ruled that the law was not retroactive. They ruled, as the employer contended, that newly enacted laws are typically prospective. They ruled that when the law stated it would be effective “immediately,” that meant the Legislature intended the law to only operate prospectively. One federal Judge noted that the New Jersey Supreme Court had interpreted similar statutes where the “take effect immediately” was used as showing prospective application. Thus, the Court concluded that the Legislature’s intent was for prospective, not retroactive, application. The Judge also observed that retroactivity could not be implied given that it is not “necessary to make the statute workable or to give it the most sensible interpretation.”
The Appellate Division saw it a different way. The Court ruled that the plaintiffs could have the wage laws applied to their case as these statutes existed at the time the lawsuit was initiated. Inexplicably, the Court held that applying a law that is on the books at the time a complaint is filed is (somehow) not applying that statute in a retroactive manner. Rather, it was applying the law in a prospective manner to cases started following August 6, 2019, the effective date of the law.
The Takeaway
I think this is a terrible decision as does every management side lawyer. It ignores an entire body of caselaw, decades old, on the issue of retroactivity and also ignores clear legislative intent. The Supreme Court can right this wrong and return this issue of law to a state of normalcy. There is some irony here, however. The law is four years old; in another two years, the issue of retroactivity won’t matter.
But it does now…