Lopez v. Marmic LLC is a landmark New Jersey Supreme Court decision handed down on March 19, 2026, and it sends a clear message to employers: hiring someone without work authorization does not give you a free pass to skip paying them.
Sergio Lopez worked as a building superintendent for Marmic LLC in Newark, New Jersey, from June 2015 to December 2018 — over three years of cleaning, maintenance, snow removal, and repairs. He was never paid a wage. Instead, his employer, Mike Ruane, offered him a rent-free basement apartment after discovering Lopez had submitted an invalid Social Security number on a W-4 form. Ruane's justification? Paying wages would be "against the law."
Lopez sued for unpaid minimum wages and overtime under New Jersey's Wage and Hour Law (WHL) and Wage Payment Law (WPL). The trial court dismissed his case, calling him not credible largely because of the invalid SSN, and faulting him for not producing detailed records of his hours. The Appellate Division agreed. The New Jersey Supreme Court reversed unanimously.
The Court's Rationale
Chief Justice Rabner's opinion rests on several interlocking principles.
Federal law does not preempt state wage protections. The Immigration Reform and Control Act of 1986 (IRCA) prohibits employers from hiring undocumented workers — but it says nothing about refusing to pay them for work already done. The Court joined a broad consensus across federal circuits and state courts holding that IRCA does not preempt state wage and hour laws. Crucially, the Court turned the employer's argument on its head: if undocumented workers could be legally paid nothing, employers would have every incentive to hire them. That outcome would undermine IRCA's core goal of deterring such hiring in the first place.
Hoffman Plastic does not apply here. Marmic leaned heavily on Hoffman Plastic Compounds, Inc. v. NLRB (2002), in which the U.S. Supreme Court barred an award of backpay — compensation for work not yet performed — to an undocumented worker who was wrongfully fired. The New Jersey court declined to extend that ruling. Payment for labor already performed is categoLrically different from speculative future wages. Requiring payment for completed work does not condone an IRCA violation; it prevents employers from profiting from one.
Barter arrangements don't satisfy wage laws. Marmic argued that the rent-free apartment constituted lawful compensation under a distinct "barter arrangement." The Court rejected this entirely. New Jersey law broadly covers anyone "suffered or permitted to work" by an employer. While the WHL does allow the fair value of lodging to count toward wages, that is a method of satisfying wage obligations — not a workaround to escape them. There is no broad barter exception to New Jersey's wage and hour laws.
The record-keeping burden belongs to the employer. Perhaps the most consequential holding for workers is the Court's treatment of proof. Both lower courts faulted Lopez for not documenting his hours. The Supreme Court flipped this analysis entirely. Under both the WHL and WPL, employers are legally required to maintain records of hours worked and wages paid. When an employer fails to do so, New Jersey statute creates a rebuttable presumption that the employee worked the hours and earned the wages claimed. The U.S. Supreme Court established the same burden-shifting framework decades ago in Anderson v. Mt. Clemens Pottery Co. (1946): once a worker proves work was performed, the employer must come forward with evidence to rebut the claim — not the other way around.
Invalid SSN evidence was improperly used. The trial court dismissed Lopez largely because it found him incredible — based primarily on his use of an invalid SSN. The Supreme Court found this was an error. Evidence of an invalid SSN functions as a proxy for immigration status, which carries a serious risk of undue prejudice under N.J.R.E. 403. Courts must evaluate such evidence carefully before trial. If its only real purpose is to expose a claimant's immigration status, it should be excluded. And because of the prejudicial use of this evidence, the case was remanded to a different trial judge.
Workers' Compensation and Undocumented Workers
The Lopez decision joins a well-established body of law holding that undocumented workers are not stripped of all labor protections. The same logic applies to workers' compensation. New Jersey's workers' compensation statute covers employees who are injured on the job, and courts in New Jersey and across the country have recognized that undocumented status does not bar a worker from receiving those benefits.
The reasoning mirrors the logic in Lopez: workers' compensation exists to protect workers injured while performing labor that benefits their employer. Denying those benefits based on immigration status would give employers a perverse incentive to place undocumented workers in dangerous conditions, knowing the financial consequences of injury would be minimized. New Jersey courts, consistent with the majority of states, have held that the workers' compensation system applies regardless of whether a worker was lawfully authorized to work. An employer cannot benefit from an employee's labor while escaping responsibility for that employee's safety.
Impact on Undocumented Workers
Lopez v. Marmic LLC carries significant practical consequences.
For workers, it affirms that years of unpaid labor are recoverable. It eliminates the ability of employers to use an invalid SSN as a credibility-destroying weapon in wage litigation. And it establishes clearly that when an employer fails to keep records — as employers frequently do with undocumented workers — the presumption runs against the employer, not the worker.
For employers, the decision is a warning. The strategy of offering in-kind compensation like free housing while withholding wages is now explicitly foreclosed. Employers who keep no records face a legal presumption that they owe whatever the worker claims.
For the broader labor market, the ruling reinforces that wage and hour protections serve an anti-exploitation purpose that transcends immigration status. When undocumented workers can enforce their rights, the economic incentive to hire them on exploitative terms weakens — which is, as the Court noted, precisely what federal immigration law is designed to accomplish.
The case is remanded for a new damages hearing before a different judge, where Marmic will bear the burden of rebutting Lopez's wage claims.
Lopez v. Marmic LLC, A-27-24 (N.J. Supreme Court, March 19, 2026)
© 2026 Jon L Gelman. All rights reserved.
Attorney Advertising
Prior results do not guarantee a similar outcome.
No comments:
Post a Comment