New Jersey Supreme Court Rules Undocumented Workers Are Entitled to Wage Protections
On March 19, 2026, the New Jersey Supreme Court issued a unanimous decision holding that New Jersey's wage and hour laws protect undocumented workers — and that employers are required to pay them for work already performed, regardless of immigration status. The decision in Sergio Lopez v. Marmic LLC reverses a trial court ruling that had dismissed an undocumented worker's unpaid wage claim on immigration-related grounds. For New Jersey employers, the ruling eliminates any ambiguity: immigration status is not a defense to a wage claim.
Background: What Happened in Lopez v. Marmic
Sergio Lopez worked as a building superintendent for Marmic LLC, a realty management company in Newark. He was paid $1,600 per month and provided an apartment valued at $800 per month as part of his compensation. When the company discovered that Lopez had provided an invalid Social Security number on his employment paperwork, it told him it could no longer pay him and instead offered him the apartment rent-free in exchange for continued part-time services — a barter arrangement.
Lopez filed a wage claim in 2018 for unpaid wages. The trial court dismissed the claim, concluding that because Lopez had submitted a false Social Security number, his testimony was not credible and his claim could not proceed. The New Jersey Supreme Court reversed that ruling in its entirety and remanded the case for a damages assessment.
The Court's Holding
The court held that the Federal Immigration Reform and Control Act (IRCA), while prohibiting employers from continuing to employ undocumented workers, does not bar the payment of wages for work that has already been performed. New Jersey's wage and hour statutes — the Wage Payment Law and the Wage and Hour Law — apply broadly to employees regardless of immigration status, and IRCA does not preempt those state law obligations.
The court drew a clear line between backpay — compensation for work not actually performed, such as wages lost due to wrongful termination — and wages for work already completed. The latter, the court held, must be paid. The court grounded this distinction in its reading of Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), a U.S. Supreme Court decision that had been read by some courts as broadly limiting wage recovery for undocumented workers. The New Jersey Supreme Court read Hoffman Plastic narrowly, holding that its preemption rationale applies only to backpay for work not performed, not to minimum wage or overtime claims for work that was actually done.
The court also rejected the argument that the barter arrangement — providing free housing in lieu of wages — satisfied the employer's obligations. And it rejected the trial court's credibility finding, holding that using an invalid Social Security number on a W-4 form does not, by itself, render a worker's wage claim incredible or forfeit the protections of state wage law.
Critically, the court noted the policy rationale underlying its holding: if employers could avoid paying wages to undocumented workers, they would be incentivized to hire them precisely because they could pay them less than the law requires — the opposite of what federal immigration law is intended to accomplish.
What This Means for New Jersey Employers
The practical consequences of this decision are significant and immediate.
Immigration status is not a wage defense. An employee's undocumented status does not relieve an employer of the obligation to pay minimum wage, overtime, or any other compensation required under New Jersey law. Employers who have operated under a different assumption face meaningful legal exposure for any unpaid wages already accrued.
Barter arrangements do not substitute for wages. Providing non-cash compensation — housing, goods, or services — in lieu of wages does not satisfy an employer's wage obligations under state law. If an employee is owed wages, those wages must be paid in accordance with the Wage Payment Law's requirements.
Documentation irregularities do not defeat wage claims. The fact that an employee used an invalid Social Security number on hiring paperwork does not bar the employee's wage claim or automatically undermine their credibility in a wage proceeding. Employers should not assume that documentation deficiencies provide protection against wage liability.
The exposure is retroactive. The New Jersey Wage Payment Law provides for recovery of unpaid wages plus liquidated damages equal to the amount of unpaid wages, plus attorneys' fees and costs. The Wage and Hour Law provides similar remedies for minimum wage and overtime violations. An employer with a workforce that includes undocumented employees and a history of irregular pay practices faces compounded exposure under both statutes.
Steps Employers Should Take Now
The Lopez decision is a prompt to audit wage practices, not just a reminder of existing law. Employers in industries with significant undocumented workforces — construction, hospitality, property management, agriculture, and food service, among others — should treat this decision as an occasion to review their exposure before a claim is filed.
That review should cover whether all workers, regardless of documentation status, are receiving at least New Jersey minimum wage for all hours worked; whether overtime is being calculated and paid correctly for hours exceeding 40 per week; whether any compensation arrangements involve non-cash substitutes for wages that may not satisfy statutory requirements; and whether payroll records are accurate, complete, and consistently maintained. Gaps in any of these areas create claims that, after Lopez, cannot be defended on immigration grounds.
Employers should also be aware that the New Jersey Department of Labor actively investigates wage complaints and intervened in support of the worker in Lopez itself. The state's enforcement posture on wage claims involving undocumented workers is now backed by the Supreme Court's unanimous endorsement of the legal framework the Department advocated.
The Lopez decision is one of the more consequential New Jersey employment law rulings in recent years for employers operating with mixed-status workforces. If you have questions about your wage practices or want to assess your exposure under New Jersey's Wage Payment Law or Wage and Hour Law, Good Pine P.C. advises employers in New Jersey and New York on employment compliance and wage and hour matters.
This article is provided by Good Pine P.C. for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney–client relationship with Good Pine P.C. Laws and legal standards vary based on specific facts and circumstances. For legal guidance tailored to your situation, please contact Good Pine P.C. directly.
