Two bills to improve New Jersey’s corporate governance laws cleared the Assembly yesterday, while the Senate gave final approval to increased penalties for wage violations that could include businesses that simply make honest mistakes.

The deliberate failure to pay wages to employees should not be tolerated, but S-1396 is not consistent in distinguishing between negligent, and willful and knowing violations. “This inconsistent language could result in inadvertent violations being treated in an overly punitive manner,” said Michael Wallace, NJBIA’s director of Employment and Labor Policy and Federal Affairs.

NJBIA also opposed the legislation because it broadens the definition of retaliation under state wage and hour laws to include any adverse action against an employee within 90 days of the employee making a complaint about a wage not being paid.

“Courts have interpreted adverse actions differently,” Wallace pointed out. “If an employer is forced to make a change to the employee’s job responsibilities or take disciplinary action as a result of an employee action within the 90 days of a wage complaint, this could be considered an adverse action under the terms of this legislation.”

Meanwhile, Senator Pat Diegnan’s efforts to make New Jersey’s corporate governance laws more competitive received a boost yesterday. The Assembly passed bills allowing companies to approve actions electronically and include a “forum selection clause” in their corporate bylaws. The two measures are part of a six-bill package supported by NJBIA.

“This legislation would make New Jersey more business friendly and more competitive with states such as Delaware, Pennsylvania and New York, which have already incorporated changes regarding shareholder matters and other business reforms,” said Mary Beaumont, NJBIA’s vice president for Health and Legal Affairs.

In the 20th century, other states began enacting more business friendly corporate governance laws that made them more attractive as a location for incorporating businesses. For example, Delaware is now the legal home to more than 66 percent of all publicly traded companies in the U.S., according to the Delaware Department of State’s website.

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