Hiring Employees in New Jersey

Classifying Your Workers Correctly

Your company must decide whether each New Jersey hire is an employee or an independent contractor using the IRS common law test and New Jersey’s strict “ABC” test. New Jersey presumes workers are employees unless you can show they are free from control, perform work outside your usual business, and are engaged in an independently established trade.

If you misclassify workers, you may owe back wages, overtime, unemployment and disability contributions, taxes, interest, and civil penalties, and you can face audits by the New Jersey Department of Labor and Workforce Development (NJDOL) and the IRS. You should review New Jersey’s misclassification enforcement initiatives and resources such as https://www.playroll.com/blog/employee-misclassification-guide before engaging contractors.

Verify Employee Work Eligibility

For every New Jersey employee, you must complete federal Form I‑9 within three business days of the start date, reviewing original identity and work authorization documents in person or via an approved remote process. You must keep I‑9s for at least three years after hire or one year after termination, whichever is later, and store them separately from personnel files.

New Jersey does not currently mandate E‑Verify for most private employers, but you may choose to use it voluntarily if you follow federal program rules consistently. You should train your hiring team to apply I‑9 procedures uniformly to avoid discrimination based on citizenship or national origin.

Create an Employee Onboarding Process

When you hire in New Jersey, you should issue a written offer letter outlining job duties, pay rate, exempt or nonexempt status, and work location, then collect federal Form W‑4 and New Jersey Form NJ‑W4 for tax withholding. Your company should also gather direct deposit details, signed acknowledgments of your employee handbook and policies, and required state notices such as wage payment information and family leave insurance rights.

You must report new hires to the New Jersey New Hire Reporting Center within 20 days and provide information about temporary disability and family leave insurance coverage. As you design onboarding, build in tools that give you clear visibility into total hiring costs in New Jersey, including taxes, insurance, and benefits.

Pay Frequency & Methods

New Jersey generally requires you to pay employees at least twice per month, with paydays no more than 16 days apart and wages due within 10 days after the end of the pay period. If you terminate an employee, you must pay all final wages by the next regular payday, and late or unpaid wages can trigger NJDOL investigations, penalties, and potential personal liability for company officers.

Payment Methods (How You Can Pay)

In New Jersey, you can choose among several payment methods as long as employees receive full, timely wages and a compliant written wage statement each pay period.

• Payroll Check: You may pay by check drawn on a New Jersey‑accessible bank, and you must ensure employees can cash it at full value without fees.
• Cash: You may pay wages in cash, but you must provide a detailed written pay stub showing hours, rates, deductions, and net pay.
• Direct Deposit (EFT): You can use direct deposit only with the employee’s voluntary written consent, and you must allow changes or revocation without penalty.
• Paycards: You may use payroll cards if employees have fee‑free access to full wages, clear disclosures, and at least one free withdrawal per pay period.
• Outsourced Payroll: You may outsource payroll to a third‑party provider, but your company remains responsible for compliance with New Jersey wage and tax laws.

When choosing methods, you should confirm that your payroll system correctly calculates New Jersey overtime, state income tax, unemployment, temporary disability, and family leave insurance contributions each pay period.

When you hire employees in New Jersey, you must register with the New Jersey Division of Revenue and Enterprise Services and withhold and remit several federal and state payroll taxes. Your company will pay employer contributions and withhold employee contributions for programs such as unemployment insurance, temporary disability, and family leave insurance.

Employer Tax Contributions

As a New Jersey employer, you’ll fund federal Social Security and Medicare, federal unemployment (FUTA), and state programs including unemployment insurance, workforce development, and sometimes disability and family leave surcharges. You must file returns and pay on regular schedules, which may be quarterly or more frequent depending on your payroll size.

Employee Payroll Tax Contributions

You must withhold federal income tax, Social Security, Medicare, New Jersey gross income tax, and employee contributions to state disability and family leave programs from each paycheck. Your company must remit these withholdings on the required deposit schedule and provide employees with year‑end Forms W‑2.

Minimum Wage in New Jersey

Most New Jersey employers must pay at least $15.13 per hour in 2025, with slightly lower rates for certain small or seasonal employers and separate rules for tipped employees. You must also comply with federal minimum wage, but New Jersey’s higher rate will usually control.

Working Hours in New Jersey

New Jersey does not set a daily maximum for adult employees, but you must pay for all hours worked and provide at least 30 minutes of unpaid break after 6 consecutive hours for certain minors. You should track hours accurately, including travel time, training, and on‑call time that counts as work under federal and state law.

Overtime in New Jersey

Nonexempt employees in New Jersey must receive overtime at 1.5 times their regular rate for hours worked over 40 in a workweek, following the federal Fair Labor Standards Act. Your company must correctly classify exempt roles and include nondiscretionary bonuses and certain differentials when calculating the regular rate.

New Jersey’s benefits landscape combines federal requirements, such as the Affordable Care Act’s large‑employer coverage mandate for employers with 50 or more full‑time employees, with robust state programs like temporary disability and family leave insurance. To stay competitive, your company will usually offer health insurance, retirement plans, and paid time off that go beyond the legal minimums.

Mandatory Leave Policies in New Jersey

Paid Time Off in New Jersey

New Jersey law does not require general vacation or PTO, but many employers offer it to attract and retain talent in a competitive market. If your company provides PTO, you should put accrual, carryover, and payout rules in writing and follow them consistently, as New Jersey courts often treat clear policies as enforceable promises.

Some employers combine vacation, personal days, and sick time into a single PTO bank, but you must still ensure you meet or exceed the state’s separate earned sick leave requirements. You should also clarify whether unused PTO is paid out at termination, since New Jersey leaves this largely to employer policy.

Maternity & Paternity Leave in New Jersey

New Jersey offers one of the more generous frameworks for parental leave in the U.S., combining federal FMLA, the New Jersey Family Leave Act, and state Temporary Disability and Family Leave Insurance benefits. Eligible employees may receive disability benefits for pregnancy and childbirth recovery, followed by paid family leave benefits to bond with a new child.

Your company must maintain job protection when required by FMLA or NJFLA and continue health benefits on the same terms during those leaves. You should coordinate your internal parental leave policies with these programs so employees understand how much time off and income replacement they can expect.

Sick Leave in New Jersey

Under the New Jersey Earned Sick Leave Law, most employees accrue at least 1 hour of paid sick leave for every 30 hours worked, up to 40 hours per benefit year. You may front‑load the full 40 hours at the start of the year and can allow carryover or pay out unused time, subject to statutory limits.

Employees can use earned sick leave for their own illness, preventive care, family member care, school closures, or issues related to domestic or sexual violence. Your company must provide a written policy and keep records of hours worked and sick leave used for at least five years.

Military Leave in New Jersey

New Jersey employers must comply with federal USERRA, which provides job‑protected leave and reinstatement rights for employees called to covered military service. State law also offers protections for members of the New Jersey National Guard and organized militia when they are on active duty or training.

You should track military orders, maintain benefits as required, and reinstate returning service members to the same or an equivalent position with the same seniority, status, and pay. Retaliation or discrimination based on military service is prohibited.

Jury Duty in New Jersey

Your company must allow employees time off to serve on a jury in New Jersey and may not threaten or penalize them for complying with a summons. State law does not generally require you to pay employees for this time, but many employers voluntarily provide some paid jury leave as a benefit.

You can request proof of jury service, such as a court notice or attendance slip, and you should clearly state in your handbook whether jury duty leave is paid or unpaid. Any policy must be applied consistently to avoid discrimination claims.

Voting Leave in New Jersey

New Jersey does not mandate paid time off for voting for most private‑sector employees, but you cannot interfere with or retaliate against employees for exercising their right to vote. In practice, many employers offer flexible scheduling on election days so employees can vote before or after work.

If your company chooses to provide voting leave, you should document eligibility, notice requirements, and whether the time is paid. Clear communication helps avoid disputes and supports your broader compliance culture.

Bereavement Leave in New Jersey

New Jersey law does not require private employers to provide bereavement leave, but many companies offer 3–5 days of paid leave for the death of an immediate family member. Providing a defined bereavement policy can support employees during difficult times and align with your culture and DEI commitments.

If you adopt bereavement leave, specify who qualifies as a covered family member, how much time is available, whether documentation is required, and whether the leave is paid. Apply the policy consistently to reduce the risk of discrimination claims.

Termination Process

New Jersey is generally an at‑will employment state, so you can terminate employees for any lawful reason, but you must avoid discriminatory or retaliatory motives prohibited by state and federal law. You should document performance issues, follow your internal disciplinary procedures, and provide final wage statements that clearly show all earnings and deductions.

Notice Period

New Jersey law does not require advance notice for individual terminations, but large layoffs or plant closings may trigger the New Jersey WARN Act, which can require at least 90 days’ written notice and mandatory severance pay for covered employers. Your company should review headcount and layoff plans carefully to determine whether state or federal WARN rules apply.

Severance

Outside of New Jersey WARN situations, severance pay is generally not required unless promised by contract or policy, but many employers offer it in exchange for a signed release of claims. If you provide severance, you must comply with federal and state rules on release agreements, including special protections for employees age 40 and over.