New Jersey Requires Payment to Undocumented Workers

On March 19, 2026, the New Jersey Supreme Court decided Lopez v. Marmic LLC, holding that employers must pay undocumented workers for work actually performed under New Jersey wage laws.

The Court rejected arguments that immigration status or informal housing arrangements relieve employers of their wage-payment obligations.

This update applies to New Jersey employers and reinforces existing obligations under the Wage Payment Law and Wage and Hour Law.

What Employers Need to Do

• Ensure wages are paid for all work performed, regardless of an employee’s immigration status, so wage-payment practices comply with New Jersey law.

• Review compensation arrangements carefully, including noncash or housing-based arrangements, to confirm they do not improperly replace or undercut required wage payments.

• Maintain complete and accurate wage-and-hour records, including hours worked and wages paid, because recordkeeping remains a central compliance obligation.

• Train managers and payroll teams on wage-payment duties, recordkeeping requirements, and the risks of relying on informal compensation practices.

• Evaluate exposure where records are incomplete or compensation practices are informal, especially in situations where the employer may have difficulty proving what was paid or owed.

Overview

The New Jersey Supreme Court confirmed that state wage laws apply to undocumented workers for work already performed, regardless of immigration status.

The decision reinforces that employers must comply with minimum wage, overtime, and wage-payment requirements, regardless of immigration status. The ruling focuses on payment for work performed, not backpay for work that was never completed.

Undocumented Status Is Not a Defense

• Employers must pay wages required under the Wage Payment Law and Wage and Hour Law.
• Immigration status does not eliminate wage protections for work already performed.
• The Court rejected arguments that federal immigration law prevents payment of earned wages.

Barter and Housing Arrangements

• Employers cannot avoid wage obligations through informal or “barter” arrangements, such as housing in exchange for labor.
• Noncash compensation, such as lodging, may be considered when calculating amounts owed but not eliminate the obligation to pay wages.
• Nontraditional arrangements do not remove the relationship from wage-law coverage.

Recordkeeping and Burden of Proof

• Employers are required to maintain records of hours worked and wages paid.
• When records are missing or incomplete, courts may rely on the employee’s estimate of wages owed.
• Lack of documentation significantly weakens an employer’s ability to defend wage claims.

Evidence and Litigation Considerations

• Courts should treat evidence such as an invalid Social Security number with caution, due to the risk of prejudice.
• Immigration status should not be used as a proxy to undermine wage claims.
• The case was remanded for the calculation of damages, including possible credit for provided housing.

Why This Matters

This decision makes clear that employers cannot rely on immigration status or informal arrangements to avoid wage-payment obligations for work already performed.

The primary operational risk for employers is failing to maintain proper wage-and-hour records or using nonstandard compensation practices, which can significantly increase liability, particularly when records are incomplete.

Key Risks for Employers

• Liability for unpaid wages owed to undocumented workers, because immigration status does not remove wage protections for work already performed.

• Increased exposure where employers use housing or other noncash compensation arrangements, particularly if those arrangements are treated as a substitute for required wage payments.

• Higher risk of unfavorable outcomes where records are incomplete or missing, since poor recordkeeping can make wage claims much harder to defend.

• Limited defenses in wage claims involving undocumented workers, especially where the employer argues that immigration status or informal arrangements excuse payment obligations.

• Increased litigation risk where recordkeeping obligations are not met, particularly when missing records shift the burden against the employer.

Additional Information

The New Jersey Department of Labor states that worker protections apply regardless of immigration status, including the right to receive wages for all hours worked.

The Court also distinguished this case from federal precedent limiting backpay for work not performed, reinforcing that payment for work already completed remains required under state law.

Source References

• New Jersey Department of Labor & Workforce Development – Press Release (March 23, 2026)
• New Jersey Supreme Court – Sergio Lopez v. Marmic LLC

Resources

• New Jersey – Wage & Hour Compliance – NJ State Wage and Hour Laws and Regulations

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