Facing an unfair termination, unpaid wages, or workplace discrimination can be overwhelming. For many New Jersey and New York employees, the fear of mounting legal bills – conjuring images of steep hourly rates and hefty retainers – stops them from seeking justice. In reality, the legal profession recognizes that people harmed at work often cannot afford to pay a lawyer up front. To bridge this gap, employment attorneys often use contingency fee arrangements that make legal representation accessible.
This guide explains how contingency fees work, addresses common misconceptions, and provides practical advice to empower employees to make informed decisions.
What Is a Contingency Fee?
A contingency fee is a payment arrangement where a lawyer’s fee depends on the outcome of the case. Rather than billing by the hour or charging a flat rate, the attorney agrees to accept a percentage of any settlement or judgment. If there is no recovery, the client pays no attorney’s fees.
Typically, the lawyer’s share is about one-third of the amount recovered, though this can vary with the case’s complexity and timeline.
How Contingency Fees Differ from Hourly and Flat Fees
- Hourly fee: The client pays for the attorney’s time, usually by providing an upfront retainer and then paying an hourly rate for work performed. Hourly billing can make costs predictable for short, defined tasks, but litigation often evolves and can consume significant attorney time.
- Flat fee: The client pays a single fixed amount for a specific service (for example, drafting a contract or handling a simple matter). Flat fees are uncommon in employment litigation because lawsuits vary widely in scope and duration.
- Contingency fee: The attorney’s compensation is tied to success. The lawyer shares the risk of the case and receives nothing unless the client wins and recovers money. This allows employees to pursue claims against well-funded employers without paying out of pocket as the case proceeds, leveling the playing field.
Why Contingency Fees Are Common in Employment Law
Employment disputes often pit an individual worker against a corporation with ample legal resources. Someone who has just lost their job is rarely in a position to pay hundreds of dollars per hour for a lawyer. Contingency fees allow employees to pursue justice despite this imbalance. The attorney defers payment until the case concludes, sharing the financial risk. This helps level the playing field, giving workers access to legal counsel without upfront costs.
Many federal and state employment laws contain fee-shifting provisions that allow a court to require the employer to pay the prevailing employee’s attorney’s fees. For example, laws such as the New Jersey Law Against Discrimination, the Family and Medical Leave Act, New Jersey’s Equal Pay Act, and wage and hour laws permit courts to award attorney’s fees to a successful plaintiff. This reduces the financial risk for lawyers and encourages them to take on strong employee cases. Fee-shifting only applies if the employee ultimately wins.
Types of Cases Often Handled on Contingency
Many employee-side cases are suited to contingency fee representation. Common examples include:
- Wrongful termination or retaliation – Being fired or disciplined for an illegal reason (for instance, due to discrimination, whistleblowing, or exercising a legal right) often gives rise to claims under laws like Title VII or the New Jersey Law Against Discrimination. Attorneys commonly take these cases on contingency.
- Unpaid wages or overtime – Claims under wage laws such as the federal Fair Labor Standards Act (FLSA) or state labor laws are frequently handled on a contingency basis. These cases (including misclassification of employees as contractors) allow workers to recover unpaid wages, additional damages, and attorney’s fees if they win, making contingency representation feasible.
- Discrimination or harassment – You are treated unfairly or subjected to a hostile work environment because of your race, sex, age, disability, pregnancy, religion, or another protected trait. Victims can file claims under state or federal civil rights statutes, and contingency fees empower them to hold employers accountable.
What Contingency Fees Do — and Do Not — Mean
Contingency fees make it possible for many employees to obtain legal representation, but they do not eliminate all costs or guarantee a result.
Not a “Free” Lawsuit
It’s a misconception that a contingency agreement means you can pursue a case at no cost or risk. In reality, these arrangements are a partnership in which the lawyer shares the risk. If the case is unsuccessful, the client typically owes no attorney’s fee. However, the client may still be responsible for certain out-of-pocket expenses. Many firms will advance the litigation costs needed to build the case – expenses like court filing fees, expert witness fees, deposition transcripts, and document production – but those costs are often deducted from any recovery or ultimately billed to the client. Always discuss how costs are handled with your attorney at the start.
No Guarantee of Success
Because a lawyer only gets paid if you win, contingency fees motivate attorneys to take strong cases. However, they do not guarantee that you will win or receive a specific amount. Even a solid claim can end with a defense verdict or a lower-than-expected settlement. Every case depends on its unique facts, the law, and the available evidence.
Signs You Should Consider Calling a Lawyer
Not every workplace issue requires an attorney, but you should think about reaching out if you experience:
- Retaliation for asserting your rights – You were fired, demoted, or punished shortly after reporting a workplace issue (e.g. discrimination or unpaid wages) or after taking legally protected leave.
- Unpaid wages or overtime – You regularly work extra hours without proper pay, or you believe you’ve been misclassified as exempt from overtime.
- Discrimination or harassment – You are facing unfair or hostile treatment because of a protected characteristic (race, gender, age, disability, etc.).
- Pressure to sign a waiver or agreement – You’re being asked to sign a severance, non-compete, or rights waiver without time to consult an attorney.
If any of these situations apply, consider discussing your case with an employment lawyer. Even if you aren’t certain that your rights were violated, a legal consultation can provide clarity about your options.
Protect Your Rights Today
If you worry about attorney’s fees but suspect your employer violated your rights, don’t let cost concerns stop you from seeking help. Contingency fee arrangements exist to make legal action affordable for workers. Song Law Firm represents employees in New Jersey and New York in wrongful termination, discrimination, wage and hour, whistleblower, and other employment cases. For qualified cases, you pay nothing unless we win, and the initial consultation is free. To discuss your situation, call 201-461-0031 or email mail@songlawfirm.com for a confidential consultation. You do not have to face these challenges alone. The law stands with you — and so do we.
Disclaimer: This column is for general informational purposes only and does not constitute legal advice. Legal outcomes depend on the specific facts of each case. Always consult an attorney about your own situation.
