Recordkeeping for Employee Compensation Purposes: New Jersey

Recordkeeping requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: John Sarno, Employers Association of New Jersey

Summary

Basic Recordkeeping Requirements

Keeping accurate wage and hour records is required by federal and state regulations, which are substantially similar. Accurate recordkeeping not only is a good business practice but accurate records can also be helpful in resolving a wage dispute with an employee or in defense to an agency investigation or audit.

In addition to the records referenced in sections under the FLSA, New Jersey regulations require that the following records be maintained for six years:

  • The name and address of each employee;
  • The date of birth if under 19 years of age,
  • The number of hours worked by nonexempt employees each day and each workweek;
  • The regular rate of pay;
  • The employee's gross earnings;
  • The employee's net earnings after itemized deduction; and
  • The basis on which wages are paid (hourly, weekly, etc.).

+N.J.A.C. 12:56-4.4.

Note that no record is required of hours worked by employees who are exempt under the New Jersey regulations. See Employee Compensation > Employee Classification: New Jersey.
In terms of the number of hours worked each day, New Jersey has adopted the federal rules on "rounding." Therefore, employers can record an employees' start and stop times to the nearest five minutes or to the nearest one-tenth or quarter of an hour. +N.J.A.C. 12:56-5.8.

Additionally, under New Jersey regulations, when employees voluntarily come in before their regular starting time or remain after their closing time, they do not have to be paid for such periods provided, of course, they do not engage in any work. See Employee Compensation > Hours Worked: New Jersey.

Tipped Employees

In addition to the records above, employers must keep a record of employees receiving gratuities containing the total gratuities received by each employee during the payroll week. +N.J.A.C. 12:56-4.7.

Meals and Lodging Records

In addition to the records above, employers that claim credit for food or lodging as a cash substitute for employees who receive food or lodging provided by the employer (see Employee Compensation > Minimum Wage: New Jersey > Meals and Lodging) must keep records to substantiate such costs. +N.J.A.C. 12:56-4.9.

Recordkeeping Requirements for Child Labor

Every employer that employs children under the age of 19 must keep a record of the following for at least one year:

  • The employee's name;
  • The employee's date of birth;
  • The employee's address;
  • The number of hours worked on each day of the week;
  • The hours of beginning and ending such work;
  • The hours of beginning and ending meal periods; and
  • The amount of wages paid.

+N.J. Stat. § 34:2-21.7.

Location of Records

All records required to be kept must be kept at the place of employment of the employee to which the record applies or a central office in New Jersey. In an unusual circumstance where it is physically impossible to keep records in New Jersey, an exception from this requirement can be sought from the Commissioner of the N.J. Department of labor and Workplace Development. +N.J.A.C. 12:56-4.5.

Generally speaking, the best practice is to store wage and hour records in a locked cabinet or desk drawer so that they can be easily accessed when necessary but preserved in a confidential manner.
Wage and hour records are subject to disclosure and review by relevant government agencies, which in New Jersey would be the Department of Labor and Workforce Development. +N.J.A.C. 12:56-4.5.

New Jersey has no rule one way or another on whether records can be kept electronically. However, since all records must be open to inspection by the N.J. Department of Labor and Workplace Development during reasonable times, the best practice is to keep hard copy documents as a backup to electronic copies.

Penalties for Noncompliance

The failure to follow New Jersey recordkeeping regulations subjects an employer to penalties. The N.J. Department of Labor and Workforce Development conducts about 8,000 audits and investigations a year, most arising out of unemployment claims and wage and hour violations.
Employers are subject to fines, administrative penalties and imprisonment for repeated, intentional violations for the failure to keep records.

An employer that knowingly and willfully violates New Jersey's wage and hour law any provision may be found guilty of a disorderly persons offense and, upon conviction for a first violation, be fined from $100 to $1,000 or imprisoned for not between 10 to 90 days, or both.

A second or subsequent violation may be punished by a fine of from $500 to $1,000 or by imprisonment for between 10 and 100 days, or both.

Separate offenses may be charged for each week an employer violates the law and fior each employee who is affected.

+N.J. Stat. § 34:11-10.

Communications in Postings Required by New Jersey Law

New Jersey requires a poster relating to recordkeeping requirements. +N.J. Stat. § 34:11-56a21.

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.