New Jersey

/in

New Jersey: Employers Required to Pay Wages for Work Performed by Undocumented Workers

APPLIES TO

All Employers with Employees in NJ

EFFECTIVE

MAR 19, 2026

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Quick Look

  • The New Jersey Supreme Court ruled that employers who have undocumented workers perform work must pay those individuals wages in accordance with the state’s Wage and Hour Law and Wage Payment Law.
  • Although the federal Immigration Reform and Control Act of 1986 makes it unlawful to hire unauthorized aliens for employment in the United States, it does not explicitly prohibit paying wages to those individuals when they have actually performed work.
  • The court found that ruling otherwise would incentivize employers to hire undocumented workers to avoid paying wages.

Discussion

In Lopez v. Marmic, the New Jersey Supreme Court ruled that employers who have undocumented workers perform work must pay those individuals wages in accordance with the state’s Wage and Hour Law (WHL) and Wage Payment Law (WPL).

 

Here, a realty management company hired a superintendent who used an invalid Social Security Number (SSN) on his W-4 form. The employer only discovered the use of the invalid SSN after the superintendent had performed work for two weeks. The employer informed him it could not legally pay him but continued to provide free housing in exchange for continued work, an arrangement that lasted for years until the superintendent was terminated. The superintendent then filed a wage claim.

 

The court reversed both the trial court’s and appellate court’s rulings that because he was undocumented, the plaintiff was not entitled to recover backpay. Although the federal Immigration Reform and Control Act of 1986 (IRCA) makes it unlawful to hire unauthorized aliens for employment in the United States, it does not explicitly prohibit paying wages to those individuals when they have actually performed work. The court found that ruling otherwise would incentivize employers to hire undocumented workers to avoid paying wages.

 

The court also rejected the argument that the barter arrangement for housing in lieu of wages established a relationship other than an employment relationship. Likewise, the burden of retaining proof of hours worked and wages paid falls on the employer and not the employee. This ruling aligns with existing case law regarding payment of wages for undocumented workers. In the event an employer suspects a worker may have invalid work authorization status, they should consult with legal counsel as soon as possible.

 

Action Items

  1. Obtain valid proof of work authorization through a valid Form I-9 for all employees.
  2. Have appropriate personnel trained on work authorization requirements.
  3. Consult with legal counsel in cases of suspected invalid work authorization documents.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase