In real-world employment settings, some workers—especially those who are new to the job or worried about being laid off—may accept arrangements such as “low pay during training,” “cash compensation,” or “non-hourly pay for part-time work.” Some employers even ask employees to sign so-called voluntary agreements, claiming that the employee consents to receiving less than the minimum wage required by law. But is this type of mutual agreement legally valid?
In New Jersey, the answer is no.
- Minimum wage is a mandatory legal protection and cannot be waived
Under the New Jersey Wage and Hour Law (N.J.S.A. especially § 34:11-56a4), employers are required to pay all employees no less than the minimum hourly wage established by the state. As of 2025, the minimum hourly wage in New Jersey is $15.49 and applies to most industries and job positions.
Importantly, this law does not permit any agreement between an employer and an employee to waive the right to minimum wage. In other words, even if the employee signs a written agreement or verbally agrees to accept lower pay, the agreement is legally invalid if the compensation falls below the minimum standard set by law.
- Administrative regulations make it clear that disguised waivers are also prohibited
The New Jersey Department of Labor makes clear in N.J.A.C. § 12:56-3.1 that all employees must be paid at least the minimum hourly wage, regardless of probationary status, part-time work, internships, or training agreements. Limited exceptions exist, such as the training wage under § 12:56-3.4, but these are allowed only under strict conditions.
Federal law provides similar protections. The Fair Labor Standards Act (FLSA) establishes a minimum baseline, and employers must comply with any higher standards set by state or local laws. The U.S. Department of Labor also frequently states on its website that employees cannot voluntarily waive their rights under the FLSA. Even if an employee signs a waiver or release, courts generally hold that such agreements are contrary to public policy and therefore legally unenforceable.
- Training periods and internships must also meet the minimum wage requirement
Many employers attempt to pay less than the minimum wage during training or internship periods. In New Jersey, such practices are unlawful unless they fall under a specific exemption provided by law, such as educational internships that meet narrowly defined criteria. As long as the employee is providing services to the employer, the minimum wage must be paid.
Likewise, arrangements involving cash pay, independent contractor classifications, or commission-only pay cannot be used to avoid the minimum wage requirement. If the employee’s average hourly earnings fall below the legal standard, the arrangement is in violation of state law.
- Minimum wage compliance is based on gross pay, but unauthorized deductions may result in violations
In practice, an employee’s take-home pay may fall below the minimum wage after deductions for federal and state income taxes, Social Security, and Medicare. This is not a violation, because legal compliance is determined based on gross wages, not net pay.
It is important to note that even if the employer’s base wage meets the minimum wage requirement, only mandatory deductions may reduce the employee’s take-home pay below the minimum wage. Non-mandatory deductions, such as charges for training, tools, or uniforms, cannot lower wages below the minimum, even with written employee consent (Limited exceptions exist for facilities provided at reasonable cost, but strict conditions apply). Such deductions risk shifting business costs to employees and undermining minimum wage protections.
- Legal consequences and remedies for employees
Employers who fail to comply with minimum wage laws may face both administrative penalties and civil liability. This remains true even if the employee allegedly “consented” to the arrangement. Employees who discover that they were paid less than the minimum wage have the right to file a complaint with the New Jersey Department of Labor or pursue a civil lawsuit.
The employer may be required to repay all unpaid wages, pay liquidated damages of up to 200 percent of the underpaid amount, cover the employee’s attorney’s fees and court costs, and be subject to administrative fines and penalties.
- Conclusion
Minimum wage is not a personal right that an employee may choose to give up. It is a mandatory legal floor established by state and federal law. It ensures that every worker receives at least a basic level of compensation. Any attempt to circumvent this rule through so-called voluntary agreements is legally meaningless.
Employers who rely on “voluntary low pay” arrangements not only risk having their agreements declared void but may also face significant legal consequences. Employees should know their rights and seek legal assistance if they suspect that their wages have fallen below the minimum standard.
This column is for reference only and does not constitute legal advice. For guidance on your specific situation, please contact 201-461-0031, WeChat: songlawfirm, or arrange a consultation via email at mail@songlawfirm.com.
