Former workers at an American unit of Samsung have sued in New Jersey state court, alleging the company refused to pay overtime and instead required them to accept comp time. According to reports of the complaint, the comp time was paid at the same rate as their regular hourly wages. The lawsuit was reported October 23, 2026. For New Jersey employers, the case raises a basic question: whether time off offered in place of premium pay satisfies wage law.
What the Lawsuit Alleges
The workers claim they were pushed to accept time off instead of overtime pay for hours worked beyond the standard workweek. Federal law generally requires overtime at one and one-half times the regular rate for nonexempt employees. For private employers, comp time in place of cash overtime is generally not permitted under the federal Fair Labor Standards Act, a rule that is often misunderstood. The allegations are claims, and the reporting available does not show that any court has found the company liable.
Why Comp Time Is a Common Compliance Trap
Some employers adopt comp time policies because they seem flexible and cost-effective. The problem is that a policy offering time off at the regular rate does not replace the premium that the law requires for overtime hours. Even if workers agree to a comp time arrangement, an employer can still face claims for unpaid overtime, plus potential penalties, if the arrangement does not satisfy the statute.
What New Jersey Employers Should Check
- Pay overtime in cash at the required premium rate for nonexempt employees
- Remove or revise any policy that offers time off in place of overtime pay
- Confirm that the overtime rate includes all compensation required in the regular rate
- Review timekeeping practices for nonexempt workers, including pre-shift and post-shift time
- Consult counsel under both federal and New Jersey wage laws before changing overtime practices
The lawsuit is a reminder that policies offering time off instead of premium pay can create significant liability. Employers should confirm practices with counsel before asking any worker to accept a substitute for overtime, and should check whether existing arrangements need correction.
A practical audit can start with a simple question: when a nonexempt employee works more than the standard hours, does the employee receive the required premium in cash? If the answer is anything other than yes, the policy deserves a closer look before a complaint forces the issue.
New Jersey employers should also note that the allegations here involve a specific policy, not a general practice. Reviewing every overtime-related policy in one pass, rather than waiting for a complaint, is a more reliable way to find and correct problems before they become claims.
For further details, please contact the lawyers at Tobia & Lovelace Esq., LLC at 201-638-0990.