NJ Supreme Court rules employer can’t swap wages for free apartment

Lopez continued working for more than three years. Marmic maintained no records relating to his employment. At trial, Ruane agreed Lopez had performed the work he described. Yet the lower courts dismissed the claim, finding Lopez not credible because of the invalid Social Security number and faulting him for not proving his exact hours. 

The Supreme Court saw it differently. 

Chief Justice Rabner, writing for all seven justices, held that there is no broad-based exception to New Jersey’s wage and hour laws for barter arrangements. A rent-free apartment, the Court found, is not proof that the employer properly compensated Lopez for his labor. 

More pointedly for employers: when a company fails to keep the wage and hour records the law requires, a rebuttable presumption kicks in. The employee’s account of hours worked and wages owed is presumed correct unless the employer can prove otherwise. Marmic, which admittedly kept no records at all, had nothing to counter with. 

The Court also addressed immigration directly. Federal immigration law bars employers from hiring undocumented workers, but it does not excuse them from paying for work already performed. Ruling otherwise, the Court reasoned, would give employers a financial incentive to hire undocumented workers and pay them less than the law requires — the exact outcome federal immigration law is designed to prevent.