Navigating employment laws in New York (NY) and New Jersey (NJ) can be challenging for businesses operating in both states. While they share similarities, key differences can impact compliance, payroll, and overall operations. Here’s what employers need to know:

1. Minimum Wage & Overtime

• New York: Minimum wage varies by region (NYC, Long Island, Westchester, and the rest of the state). Employers must also comply with scheduled increases.
• New Jersey: A statewide minimum wage applies, with annual adjustments based on inflation.
• Overtime: Both states generally follow federal overtime rules, but NY has additional daily overtime rules for certain industries.

2. Paid Sick Leave

• New York: Employees accrue one hour of sick leave for every 30 hours worked, with a maximum based on employer size.
• New Jersey: Requires up to 40 hours of paid sick leave per year, regardless of employer size.

3. Family & Medical Leave

• New York: Provides Paid Family Leave (PFL), offering partial wage replacement and job protection for certain family-related absences.
• New Jersey: Offers Family Leave Insurance (FLI), providing wage replacement but not job protection.

4. Workers’ Compensation & Disability Benefits

• New York: Employers must provide both workers’ compensation and short-term disability benefits for employees.
• New Jersey: Requires workers’ compensation but disability benefits are optional unless the employer opts into the state plan.

5. Independent Contractor vs. Employee Classification

New York

• ABC Test (in certain industries):
  • A: The worker is free from control and direction in performance of services.
  • B: Services are outside the usual course of the business.
  • C: Worker is customarily engaged in an independently established trade.
• Common Law Factors: These are also considered, which include control over the worker’s duties and the relationship’s permanence.

New Jersey

• Strict ABC Test:
  • A: The worker must be free from control or direction.
  • B: Services are outside the usual course of the employer’s business.
  • C: Worker is engaged in an independently established trade, occupation, or business.

6. Final Paycheck Requirements

• New York: Employers must issue final pay on the next scheduled payday.
• New Jersey: Final wages must be paid by the next regular payday but within a set timeframe if terminated.

7. Harassment & Discrimination Protections

• New York: Has stricter anti-harassment laws, including mandatory annual sexual harassment training for all employees.
• New Jersey: Also requires harassment prevention but does not mandate annual training.

8. Restrictive Covenants (Non-Compete Agreements)

Overview:

• Independent Contractor Classification: New York uses a combination of the ABC Test in specific industries and common law factors to assess independent contractor status, offering some flexibility. New Jersey, on the other hand, adheres to a strict ABC Test, making it harder to classify workers as independent contractors.
• Non-Compete Agreements: New York will enforce reasonable non-compete agreements based on their scope, duration, and geographic reach. New Jersey, while currently following common law standards, has proposed legislation that could limit the use and enforceability of non-compete clauses.

TOPIC	NEW YORK	NEW JERSEY
Independent Contractor Classification	ABC Test (for certain industries) along with COmmon Law Factors	Strict ABC Test (more difficult to classify as independent contractor)
Non-Compete Agreements	Enforces reasonable non compete agreements in scope, duration, and geography	Proposed legislation to limit non competes; follow common law enforceability standards

Stay Compliant & Informed

Understanding the differences between New York and New Jersey laws is crucial for compliance and avoiding costly penalties. Each state has its own set of regulations that govern independent contractor classification, non-compete agreements, and other essential employment matters. Failing to navigate these legal distinctions can lead to legal disputes, financial penalties, and reputational damage.

Employers should regularly review state regulations and seek legal guidance to stay up to date on evolving laws. Staying informed about the latest legal changes in both New York and New Jersey ensures that businesses not only protect themselves but also create fair and compliant practices for their workforce. By consulting with legal experts, employers can adapt their policies to maintain compliance with state-specific requirements, avoid unnecessary risks, and foster a positive working environment.

Compliant and informed businesses are better positioned to thrive while minimizing legal exposure.

Need help navigating complex labor laws? Contact us today for expert compliance solutions!