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Payment of Wages: New Jersey

Payment of Wages requirements for other states

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

Author: Vicki M. Lambert, The Payroll Advisor

Summary

  • Employers in New Jersey may pay employees in cash, by check, by direct deposit, or with electronic paycards provided certain conditions are met. Penalties apply for noncompliance. See Wage Payment Methods.
  • New Jersey law requires different pay frequencies for exempt and nonexempt employees. It also requires that employees be paid within a certain number of days after the end of each pay period. Penalties may be imposed for violating these requirements. See Pay Frequency.
  • The law specifies the types of deductions that may and may not be made from employees' pay. Penalties are imposed for noncompliance. See Permitted and Prohibited Wage Deductions.
  • All employees must be provided with a statement of pay deductions for each pay period in which deductions are made. Electronic pay statements are also permitted. Penalties apply for failure to provide pay statements. See Pay Statement Requirements.
  • Terminated employees must be paid within a certain amount of time, whether employment ends voluntarily or involuntarily. An exception applies to certain employees who are suspended due to a labor dispute. If an employer provides vacation benefits to employees, accrued benefits must be administered uniformly on termination of employment as to all employees and according to established policy, employment agreement or union contract. An employer is not required to pay out any unused, accrued sick leave upon an employee's separation from employment, unless an employer policy or collective bargaining agreement requires it. Employers may face penalties for violating these requirements. See Termination Pay.
  • Under the New Jersey Wage Theft Act (WTA), an employer (or its successor) commits wage theft if it knowingly fails to timely pay all wages, minimum wage payments, overtime pay or benefits due to an employee. Retaliation against an employee who complains of an employer's wage theft is punishable. An employer is required to provide all current employees and new hires with a notice that discusses employees' rights in regard to wage theft. Severe penalties apply to employers that fail to comply with the law. See Wage Theft.
  • Wages due to deceased employees may only be paid to certain people in a certain order, and only if the individuals satisfy specific prerequisites. See Deceased Employee Wages.
  • Wages that remain unclaimed by an employee for one year are considered abandoned. Employers are required to file a report on specific forms and remit the wages if they are above a certain amount to a state agency by a particular due date. Employers are also required to send notice of the unclaimed wages to the employee's last known address within a certain time frame. Stiff civil penalties, plus interest, may be imposed for noncompliance. See Unclaimed Wages.

Wage Payment Methods

Cash or Check

Employers in New Jersey must pay the full amount of wages due to employees in cash, or with checks that can be cashed in full at banks where arrangements have been made for cashing without difficulty. +N.J. Stat. § 34:11-4.2.

Employers may not charge employees check cashing fees charged by the bank on which a check is drawn. The employer must pay any such fees.

The employer is also responsible for any check cashing fees if it fails to make suitable check cashing arrangements for its employees.

+N.J.A.C. 12:55-2.4(e), +N.J.A.C. 12:55-2.4(f).

Direct Deposit

In lieu of paying wages by cash or check, an employer may arrange with one or more financial institutions to pay employees by direct deposit, so long as all of the following conditions are met:

  • The employee first consents in writing, without intimidation, coercion, or fear of discharge or reprisal for refusal to accept the direct deposit arrangement;
  • Consent is not made a condition of hire or continued employment;
  • The employee can withdraw and use the amounts deposited to the same extent and in the same manner as if the deposit had been made directly by the employee;
  • The employer provides the employee with a statement of deductions made from his or her wages for each pay period in which deductions are made; and
  • The employee is permitted, after giving timely notice to the employer, to elect to instead be paid in cash, by check or paycard.

An employer is responsible for payment of any check-deposit-return fees and must reimburse the employee (separately from wages) as soon as possible, but no later than the next regularly scheduled payday.

+N.J.A.C. 12:55-2.4; +N.J. Stat § 34:11-4.2a

Electronic Paycards

In lieu of paying wages to an employee in cash, by check or direct deposit, New Jersey employers may offer payment by payroll debit cards, if all of the following conditions are met:

  • The employee first consents in writing to the deposit of his or her wages into a payroll debit card account;
  • The employer obtains the employee's consent without intimidation, coercion, or fear of discharge or reprisal for refusal to accept the payroll debit card arrangement;
  • Employee consent is not made a condition of hire or continued employment;
  • The employee may withdraw and otherwise use and access the wages to the same extent and in the same manner as if he or she had been paid by paycheck;
  • At least once per pay period, the employee must be able to withdraw his or her wages in full, without any fee or difficulty;
  • The employer must provide the employee with a statement of deductions made from his or her wages for each pay period in which deductions are made;
  • Before obtaining the employee's consent, the employer must disclose in writing to the employee each of the features of the payroll debit card (for example, withdrawal at any ATM or point-of-sale use), including any fee(s) that the employee may be charged for the use of each of those features. The written disclosure must also include an explanation of the specific means by which the employee may, at least once per pay period, use the payroll debit card to withdraw his or her wages in full without any fee or difficulty; and
  • The employer must allow the employee, after he or she gives timely notice to the employer, to elect not to have his or her wages paid by payroll debit card and to be paid his or her wages in cash, by check or by direct deposit.

+N.J.A.C. 12:55-2.4(i).

Penalties

Employers that violate the New Jersey wage payment method laws must pay an administrative fee to the Commissioner of Labor and Workforce Development on all gross amounts owed to employees, according to the following schedule:

  • First violation - 10% of the amount due to the employee;
  • Second violation - 18% of the amount due to the employee;
  • Third and subsequent violations - 25% of the amount due to the employee.

+N.J.A.C. 12:55-1.5.

As an alternative or in addition to administrative fees, the Commissioner may also impose an administrative penalty in the following amounts:

  • First violation - not more than $250;
  • Second and subsequent violations - $25 to $500.

Before any administrative penalties may be imposed, the employer must receive notice by certified mail of the violation and the amount of the penalty, along with an opportunity to request a formal hearing. A request for a formal hearing must be received within 15 working days following the receipt of the notice.

+N.J.A.C. 12:55-1.6.

Pay Frequency

Nonexempt Employees

New Jersey employers must pay the full amount of wages due to nonexempt employees at least semimonthly, on regular pay days designated in advance.

Exempt Employees

An employer may establish regular paydays that occur less frequently than semimonthly for bona fide executive, supervisory and other special classifications of employees, provided that the employees are paid in full at least once each calendar month on a regularly established schedule.

If a regular payday falls on a nonwork day, that is, a day on which the workplace of an employee is not open for business, payment shall be made on the immediately preceding work day, except where it is otherwise provided for in a collective bargaining agreement.

+N.J. Stat. § 34:11-4.2.

Lag Time Before Pay

Employees must be paid within 10 days after the end of each pay period. If the regular payday falls on a nonwork day, employees must be paid on the preceding work day. +N.J.A.C. 12:55-2.4; +N.J. Stat. § 34:11-4.2.

Penalties

Employers that violate the New Jersey pay frequency laws must pay an administrative fee to the Commissioner of Labor and Workforce Development on all gross amounts owed to employees, according to the following schedule:

  • First violation - 10% of the amount due to the employee;
  • Second violation - 18% of the amount due to the employee;
  • Third and subsequent violations - 25% of the amount due to the employee.

+N.J.A.C. 12:55-1.5.

As an alternative or in addition to administrative fees, the Commissioner may also impose an administrative penalty in the following amounts:

  • First violation - not more than $250;
  • Second and subsequent violations - $25 to $500.

Before any administrative penalties may be imposed, the employer must receive notice by certified mail of the violation and the amount of the penalty, along with an opportunity to request a formal hearing. A request for a formal hearing must be received within 15 working days following the receipt of the notice.

+N.J.A.C. 12:55-1.6.

Permitted and Prohibited Wage Deductions

Permitted Deductions

Employers may make the following types of deductions from employees' wages:

  • Deductions required by state or federal law;
  • Amounts withheld for contributions authorized either in writing by employees, or under a collective bargaining agreement, to employee welfare, insurance, hospitalization, medical and/or surgical and profit-sharing plans, to plans establishing individual retirement annuities on a group or individual basis (under § 408(b) of the federal Internal Revenue Code (IRC)), or to individual retirement accounts at any state or federal bank, savings bank or savings and loan association (as defined by § 408(a) of the IRC) for the employee and/or his or her spouse;
  • Amounts withheld for contributions authorized either in writing by employees, or under a collective bargaining agreement, for payment into employer-operated thrift plans, or security option or security purchase plans to buy securities of the employing corporation, an affiliated corporation, or other corporations at market price or less, provided the securities are listed on a stock exchange or are marketable over the counter;
  • Deductions authorized by employees for payment into their personal savings accounts, such as payments to a credit union, savings fund society, savings and loan or building and loan association, and payments to banks for Christmas, vacation, or other savings funds, provided the deductions are approved by the employer;
  • Deductions for employer products purchased in accordance with a periodic payment schedule contained in the original purchase agreement, deductions to pay for employer loans to employees in accordance with a periodic payment schedule contained in the original loan agreement, deductions to pay for safety equipment, deductions to purchase US Savings Bonds, deductions for payments to correct payroll errors, and deductions to pay costs and related fees for the replacement of employee identification used to allow employees access to sterile or secured areas of airports, in accordance with a fee schedule described in any airline media plan approved by the federal Transportation Security Administration, provided the deductions are approved by the employer;
  • Amounts withheld for contributions authorized by employees for organized and generally recognized charities, provided the deductions are approved by the employer;
  • Deductions authorized by employees or their collective bargaining agents to pay for the rental, laundering or dry cleaning of work clothing or uniforms, provided the deductions are approved by the employer;
  • Deductions for labor organization dues and initiation fees, and any other labor organization charges permitted by law;
  • Amounts withheld for contributions authorized in writing by employees, pursuant to a collective bargaining agreement, to a political committee and/or a continuing political committee established by the employees' labor union in order to aid or promote the nomination, election or defeat of any candidate for a public office or the passage or defeat of any public question;
  • Amounts withheld for contributions authorized in writing by employees to a political committee in order to aid or promote the nomination, election or defeat of any candidate for a public office or the passage or defeat of any public question, provided that any administrative expenses incurred by the employer are paid by the committee at the option of the employer;
  • Deductions authorized by employees for employer-sponsored programs for the purchase of insurance or annuities on a group or individual basis, if otherwise permitted by law;
  • Deductions for health club membership fees;
  • Deductions for child care services; and
  • Any other contributions, deductions and payments that the Commissioner of Labor may authorize by regulation, if approved by the employer.

+N.J. Stat. § 34:11-4.4.

Mass Transit Commuter Tickets

Employers may make payroll deductions in order to provide mass transit commuter tickets to employees if employees authorize the deductions in writing or in a collective bargaining agreement, and if the tickets are made available to all employees.

An employer that provides transportation for employees to a work site may deduct the actual cost of the transportation, excluding profit to the employer, if employees authorize the deductions in writing or in a collective bargaining agreement.

+N.J.A.C. 12:55-2.2.

Prohibited Deductions

Employers may not deduct the cost of uniforms that employees are required to wear to work or medical examinations required as a condition of employment. If employees pay for uniforms in cash and the cash payment brings their wages below the minimum wage, the employer must make up the difference to meet the minimum wage for that week. +N.J.A.C. 12:56-17.1.

Penalties

An employer that deducts the cost of a medical examination is liable for a $100 penalty.

Employers that violate the New Jersey wage deduction laws must pay an administrative fee to the Commissioner of Labor and Workforce Development on all gross amounts owed to employees, according to the following schedule:

  • First violation - 10% of the amount due to the employee;
  • Second violation - 18% of the amount due to the employee;
  • Third and subsequent violations - 25% of the amount due to the employee.

+N.J.A.C. 12:55-1.5.

As an alternative or in addition to administrative fees, the Commissioner may also impose an administrative penalty in the following amounts:

  • First violation - not more than $250;
  • Second and subsequent violations - $25 to $500.

Before any administrative penalties may be imposed, the employer must receive notice by certified mail of the violation and the amount of the penalty, along with an opportunity to request a formal hearing. A request for a formal hearing must be received within 15 working days following the receipt of the notice.

Pay Statement Requirements

All New Jersey employers must furnish each employee with a statement of deductions made from his or her wages for each pay period in which deductions are made.

+N.J. Stat. § 34:11-4.6.

Electronic Pay Statements

New Jersey law is silent regarding how pay statements may be provided. However, the Department of Labor and Workforce Development has taken the position that pay statements may be provided electronically or in hard copy.

Penalties

Employers that violate the New Jersey law regarding pay statements must pay an administrative fee to the Commissioner of Labor and Workforce Development on all gross amounts owed to employees, according to the following schedule:

  • First violation - 10% of the amount due to the employee;
  • Second violation - 18% of the amount due to the employee;
  • Third and subsequent violations - 25% of the amount due to the employee.

+N.J.A.C. 12:55-1.5.

As an alternative or in addition to administrative fees, the Commissioner may also impose an administrative penalty in the following amounts:

  • First violation - not more than $250;
  • Second and subsequent violations - $25 to $500.

Before any administrative penalties may be imposed, the employer must receive notice by certified mail of the violation and the amount of the penalty, along with an opportunity to request a formal hearing. A request for a formal hearing must be received within 15 working days following the receipt of the notice.

+N.J.A.C. 12:55-1.6.

Termination Pay

If an employee is discharged, suspended as a result of a labor dispute or laid off, or if an employee quits, resigns, or leaves employment for any reason, the employer must pay the employee all wages due by the regular payday for the pay period in which the termination, suspension or cessation of employment took place.

Employees who are paid in part or in full by an incentive system must be paid a reasonable approximation of all wages due until the exact amounts due can be computed.

However, if an employee is suspended as a result of a labor dispute involving employees who make up the payroll, the employer has an additional 10 days to pay, and the payment must be made either through the regular pay channels or by mail if requested by the employee.

+N.J. Stat. § 34:11-4.3.

Accrued Time

Vacation time. New Jersey law is silent regarding the payment of unused, accrued vacation on termination of employment. However the Department of Labor and Workforce Development has taken the position that, if an employer provides vacation benefits to employees, the benefits must be administered uniformly as to all employees and according to established policy, employment agreement or union contract.

Paid sick leave. An employer is not required to pay out any unused, accrued sick leave upon an employee's separation from employment, unless an employer policy or collective bargaining agreement requires it. If an employee is terminated, laid off, furloughed or otherwise separated from employment and is rehired within six months of the separation, any unused, accrued sick leave must be reinstated. +2018 Bill Text NJ A.B. 1827.

For more information on these and other New Jersey paid sick leave requirements, see Other Leaves: New Jersey.

Penalties

Employers that violate New Jersey termination pay laws must pay an administrative fee to the Commissioner of Labor and Workforce Development on all gross amounts owed to employees, according to the following schedule:

  • First violation - 10% of the amount due to the employee;
  • Second violation - 18% of the amount due to the employee;
  • Third and subsequent violations - 25% of the amount due to the employee.

+N.J.A.C. 12:55-1.5.

As an alternative or in addition to administrative fees, the Commissioner may also impose an administrative penalty in the following amounts:

  • First violation - not more than $250;
  • Second and subsequent violations - $25 to $500.

Before any administrative penalties may be imposed, the employer must receive notice by certified mail of the violation and the amount of the penalty, along with an opportunity to request a formal hearing. A request for a formal hearing must be received within 15 working days following the receipt of the notice.

+N.J.A.C. 12:55-1.6.

A sales representative who is terminated may sue the principal if it fails to pay final commissions.

Wage Theft

Under the New Jersey Wage Theft Act (WTA), effective August 6, 2019, an employer (or its successor) commits wage theft if it:

  • Knowingly fails to timely pay all wages and benefits due to an employee;
  • Fails to pay the minimum wage or overtime due to an employee; or
  • Retaliates against an employee who complains to the employer, a representative of the employer or the labor commissioner or initiates legal action against the employer. Retaliation is presumed if an employer takes any adverse action against an employee within 90 days of the employee's complaint. For more information about these retaliation provisions, see Employee Discipline: New Jersey.

Under the WTA, an employee has up to six years to sue an employer to recover lost wages. An employer that commits wage theft is liable to the employee for the full amount of wages and benefits owed, plus liquidated damages equal to 200% of the total. The employee may also collect reasonable litigation costs.

An employer will not be liable for liquidated damages if it:

  • Failed to pay the employee due to an inadvertent error made in good faith;
  • Acknowledges the violation;
  • Pays the amount owed within 30 days of notice of the violation; and
  • If liable for retaliation against an employee, offers to reinstate the employee and takes other actions to correct the retaliatory action.

+N.J. Stat. § 34:11-4.10, +N.J. Stat. § 34:11-58.

Alternatively, the employee may assign the wage claim to the labor commissioner, or the labor commissioner may institute its own action for wage theft if the violations are discovered during the course of an audit or inspection. The labor commissioner is authorized to take assignments of claims from employees of up to $50,000 in unpaid wages. If the labor commissioner determines that the employer owes the employee at least $5,000, the commissioner must also take the following actions:

  • Inform the employer that the commissioner may conduct an audit of the employer or any successor firm of the employer; and
  • Recommend to the New Jersey Division of Taxation that the Division conduct an audit of the employer to ensure the employer's proper withholding and payment of payroll and other taxes.

In addition, if the labor commissioner initiates an investigation under the WTA or any of the other state wage and hours laws, and the employer fails to provide the required employee records, there will be a rebuttable presumption (i.e., the labor department will assume it to be true unless proven otherwise) that the employee worked for the employer for the period of time and for the amount of wages as alleged in the wage claim. This rebuttable presumption will not apply to an employer only if it can demonstrate it does not have sufficient employee records as a result of a natural disaster.

+N.J. Stat. § 34:1A-1.12, +N.J. Stat. § 34:11-58.

Notice to Employees

An employer is required to provide all current employees and new hires with a notice that discusses these rights. The labor commissioner will make a model notice available. For further information about this notice, see New Hire Paperwork: New Jersey. +2018 Bill Text N.J. S.B. 1790, § 1034:1A-1.12.

Penalties

An employer that is found to have retaliated against an employee may be required to reinstate the employee.

An employer that fails to comply within 10 days with a court judgment or final determination of the commissioner to pay wages and liquidated damages to an employee may have its business licenses suspended until the employee is paid. Employees affected by a stop-work order must be paid for 10 days.

Alternatively, the commissioner may issue a stop-work order against the employer, which will apply only to the establishment at which the aggrieved employee works. The employer must post the stop-work order. As a condition of releasing the stop-work order, the employer may be required to file reports for a probationary period of two years.

The following criminal penalties may also be imposed:

  • First violation - The employer is guilty of a disorderly persons offense and is subject to a fine of $500 to $1,000 and/or imprisonment for 10 to 90 days.
  • Second violation - The employer is guilty of a disorderly persons offense and is subject to a fine of $1,000 to $2,000 and/or imprisonment for 10 to 100 days.
  • A pattern of wage theft by an employer (i.e., two or more occasions where the employer was convicted of wage theft) is punishable as a crime of the third degree (effective November 1, 2019).

+N.J. Stat. § 34:1A-1.12, +N.J. Stat. § 34:11-4.10; +2018 Bill Text N.J. S.B. 1790, § 13.

Deceased Employee Wages

In the event of an employee's death, an employer may pay all wages owed to the deceased employee, upon proper demand on the employer, in the absence of actual notice of the pendency of probate proceedings, and without requiring letters testamentary or of administration, to the following individuals in the following order:

  • The decedent's surviving spouse;
  • The decedent's children age 18 and older in equal shares, or to the guardian of children under age 18;
  • The decedent's father and mother or the survivor of the two; and
  • The decedent's siblings, or the person who pays the funeral expenses.

Payments made after proof of the relationship is presented release and discharge the employer in the amount of the payment.

+N.J. Stat. § 34:11-4.5.

Unclaimed Wages

Reporting Requirements

In New Jersey, wages are considered abandoned property if they are unclaimed by an employee for one year. Paycards issued in place of paychecks are also deemed abandoned if unclaimed after one year.

Employers must file an unclaimed property report before November 1 of each year for property appearing on the employer's records as of the preceding June 30.

Before reporting wages as unclaimed property, the employer must perform due diligence. Specifically, if the amount of the unclaimed property is $50 or more, the employer must send a notice via certified mail with return receipt requested to the employee at the last known address.

This notice must inform the employee that the employer is in possession of unclaimed property that will be turned over to the State Treasurer unless the employee claims it from the employer before the report is filed.

Due diligence should be performed not more than 120 days nor less than 60 days before filing the report.

The state provides a sample letter to use for this notice.

To report the unclaimed property, the employer must complete an Unclaimed Personal Property Report, Forms UP-1 (Holder Information) and UP-2 (Owner Information).

The report must be signed by an appropriate company officer. Items under $50 may be reported in the aggregate, but full reporting of all property is encouraged.

The state of New Jersey uses an automated process for payment of claims. It accepts NAUPA Standard Electronic File Format on CD-ROM, 1.44MB 3 ½ inch floppy disks and HRS-Pro encrypted files via e-mail.

Free reporting software (HRS Pro) is available on the unclaimed property website.

For holders who are reporting $50,000 or more, a Fed Wire or an ACH Transfer is required. Holders reporting more than 20 records must report on electronic media. Any other holders are encouraged to submit on electronic media.

If an employer has no unclaimed property to report for the current reporting year, a negative report is required to be filed. The employer may use a Form UP-1 or a company letter, signed by an officer, stating that there is no unclaimed property to report.

New Jersey does not have reciprocal agreements with any other states for purposes of reporting unclaimed property.

N.J. Stat. § 46:30B-4 through N.J. Stat. § 46:30B-105.

Contact Information

Employers that have questions about reporting unclaimed wages may contact the Holder Reporting Section.

Penalties

An employer that fails to pay or deliver unclaimed property within the required time period must pay interest to the administrator of unclaimed property at the annual rate of 10% above the annual rate of discount in effect on the date the property should have been paid or delivered. +N.J. Stat. § 46:30B-103.

An employer that fails to report, pay or deliver unclaimed property within the required time period, or that fails to perform other required duties as to unclaimed property, is liable for, in addition to the interest, a civil penalty of $200 for each day the report, payment or delivery is withheld or the duty is not performed, up to a maximum of $100,000. +N.J. Stat. § 46:30B-104.

An employer that willfully fails to report, pay or deliver unclaimed property within the required time period, or that fails to perform other required duties is liable for, in addition to interest, a civil penalty of $1,000 for each day the report, payment or delivery is withheld or the duty is not performed, up to a maximum of $250,000, plus 25% of the value of any property that should have been, but was not, reported. +N.J. Stat. § 46:30B-105.

New Jersey Department of the Treasury, Unclaimed Property Administration; State of New Jersey Guidelines for Reporting Stored Value cards (SVCs and Pay Cards); New Jersey Unclaimed Property Holder Packet.

Future Developments

Small Business Retirement Marketplace

Under the Small Business Retirement Marketplace Act, the state treasurer (or its designee) is required to implement a marketplace, or contract with private parties to implement a marketplace, through which eligible employers and approved retirement plans may connect. The Act is intended to educate small employers on plan retirement availability and promote, without mandating participation, low cost, low burden retirement savings vehicles for employees who do not otherwise have access to tax-qualified retirement plans.

The treasurer must implement the marketplace by taking the following steps:

  • Approve financial services firms for participation in the marketplace;
  • Ensure that approved plans comply with the Internal Revenue Code;
  • Establish a protocol to address rollovers for eligible employers that have workers in other states, and whether out-of-state employees with existing IRAs may roll them into the plans offered through the marketplace;
  • Design, launch and operate a website that includes information on how eligible employers can voluntarily participate in the marketplace;
  • Develop marketing materials about the marketplace that can be distributed electronically or posted on both public and private sector maintained websites;
  • Identify and promote existing federal and state tax credits and benefits for employers and employees that are related to encouraging retirement savings or participating in retirement plans; and
  • Promote the benefits of retirement savings and other information that promotes financial literacy.

There is no set roll-out date for the Marketplace, but employers should be aware of it in case it is rolled out. The Marketplace will not be rolled out if it is determined that it places a financial burden on taxpayers or fewer than two financial service firms agree to participate.

+N.J. Stat. § 43:23-2, +N.J. Stat. § 43:23-5, +N.J. Stat. § 43:23-6.

Covered employers and employees. An employer than has fewer than 100 employees may participate in the marketplace if a majority of the employees work in the state. If sufficient funds are available, the state treasurer is authorized to approve incentive payments to participating employers. An employee is eligible to participate if he or she works primarily in the state and would be qualified to participate in a federal tax-qualified retirement program.

+N.J. Stat. § 43:23-3, +N.J. Stat. § 43:23-9.

Plan types. The state treasurer must approve a diverse array of private retirement plan options, including life insurance plans that are designed for retirement purposes, and plans for eligible employers, including:

  • A SIMPLE IRA type plan that provides for employer contributions to participating enrollee accounts; and
  • A payroll deduction individual retirement account type plan or workplace-based individual retirement accounts open to all workers in which the employer does not contribute to the employees' account.

Participating financial services firms cannot charge a participating employer an administrative fee or surcharge and cannot charge enrollees more than 100 basis points in total annual fees. Participating financial service firms must provide information about their products' historical investment performance.

A participating employer may be considered a fiduciary under the Employee Retirement Income Security Act (ERISA), and is required to comply with any annual reporting and employee notification requirements that may be required under the IRC and ERISA.

Plan options. Participating financial services firms must offer at least two products, including (i) a target date, or similar, fund with asset allocations and maturities designed to coincide with the expected date of an employee's retirement, and (ii) a balanced fund, consisting of mutual funds, that balances its portfolio holdings and generally includes a mix of stocks and bonds.

Approved plans must include the option for employees to roll pretax contributions into a different IRA or another eligible retirement plan after ceasing participation in a marketplace plan.

+N.J. Stat. § 43:23-5

Additional Resources

New Jersey Payment of Wages Poster