AVALON – In an Oct. 22 press release from the New Jersey Department of Labor (NJDOL), officials announced that Avalon and Stone Harbor had failed to pay earned overtime to members of the beach patrols in both boroughs.
According to the release, Avalon withheld $116,151 in earned overtime for 125 employees. Stone Harbor was found to have failed to pay $94,114 to 76 members of its beach patrol.
While the press release created an image of the state agency intervening and protecting the rights of seasonal beach patrol personnel, the full story is more complex and not as laudatory of NJDOL.
A Change in Status
Up until 2019, seasonal workers like those on the beach patrol were exempt from the state requirements concerning payment of overtime for more than 40 hours worked. In February 2019, Governor Phil Murphy signed new legislation to gradually increase the state’s minimum wage to $15 per hour by 2024.
What was little known at the time is that the exemption that had always existed for certain seasonal workers with regard to overtime was also changed. As a result, those workers qualified for overtime.
There is no record that the state ever issued a local public finance notice informing municipalities of the change. The Herald reviewed all local finance notices from the state since the February 2019 signing of the new legislation and found no mention of the change in status for seasonal employees.
The Investigation
The cases in Avalon and Stone Harbor announced in the press release were brought to light because of specific complaints raised by seasonal employees of the beach patrol in each town.
The investigation mentioned in the state’s press release was not a case of the state on its own initiative launching an investigation to see if the guards were being paid correctly. The outcome was instead, a result of a formal complaint.
Even in Atlantic City, where municipal financial management is under state oversight, a total of 146 employees were found to be owed $197,150 in overtime.
The payments, which have already been distributed to the covered workers in Avalon and Stone Harbor, were for 2020 and 2021 when the change to state law was not yet known. By 2022, the municipalities were aware of the new ground rules and managed their personnel accordingly.
Avalon officials report that the borough will pay no fine for the unwitting infraction because the state admits the lack of notice.
Municipalities Play Catch Up
It is possible that other shore communities in Cape May County may find themselves in a similar situation as news of the NJDOL action spreads. The Wildwood Board of Commissioners voted on a resolution to “Authorize reimbursement to the Wildwood lifeguards for overtime for 2020 and 2021” at their Oct. 26 meeting.
Avalon Business Administrator Scott Wahl said this is not an issue of fair pay for the Beach Patrol. He pointed to the increases the borough has implemented for beach patrol members that bring pay well above the state’s minimum wage limits.
Stone Harbor Business Administrator Robert Smith said that “the borough has a long record of treating employees – all employees – fairly in the area of overtime and compensation.” Smith added that without state notice, the types of changes that occurred in 2019, when all eyes were on the minimum wage increase, are “difficult to detect.”
It is also worth noting that the municipal auditors for Avalon and Stone Harbor were never informed of the change, resulting in no issue concerning payment in the municipal audit reports.
So, Who Failed Here?
NJDOL Commissioner Robert Asaro-Angelo said, “New Jersey’s lifeguards put their lives on the line for the safety of summer shore visitors, so it’s our responsibility to ensure they receive all the wages they are entitled to.”
The phrasing of the statement creates the impression that municipal employers were consciously avoiding paying the wages required. It also makes no mention of the state’s failure to inform the municipalities of a change in the exemption that had been in place up to 2019.
A better explanation might be that a change in state law that municipalities were unaware of led to the omission of newly-required overtime.
In Stone Harbor, Smith said, “We don’t expect a phone call or a tap on the shoulder, but some type of heads up from the Department of Labor would have been welcomed.”
Thoughts? Email vconti@cmcherald.com.
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