New Case Offers Guidance on Good Faith Defense for Failure to Pay Overtime Under 50% Sales Exemption, As Applied to Auto Mechanics


The New Jersey Appellate Division has rendered an opinion in an area with few precedents to guide employers—how to apply the “good faith defense” in the context of an overtime claim by an auto mechanic where the employer had received a green light for its practices by two NJ Department of Labor (“DOL”) investigators in several prior audits. A failure to pay $9400 in overtime mushroomed to a total liability of $85,733.56 for the employer (excluding the additional substantial costs of defending the action, and attorneys’ fees and costs on appeal).

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