Goldmann, Kilkenny and Collester. The opinion of the court was delivered by Kilkenny, J.A.D.
Plaintiff Department of Labor and Industry of New Jersey brought an action in the Monmouth County District Court, pursuant to N.J.S.A. 34:11-7, to recover $650 in penalties provided for by N.J.S.A. 34:11-6 for seven alleged violations by defendant of N.J.S.A. 34:11-4. This statute requires employers to pay their employees at least every two weeks, in lawful money of the United States, "the full amount of wages" earned up to within 12 days of such payment. There was a judgment for defendant. Plaintiff appeals therefrom.
The appeal has been submitted on the following agreed statement of facts:
"Defendant, Asbury Metropolitan Hotel Company, operates a hotel known as the 'Metropolitan Hotel & Pool' in the City of Asbury Park, Monmouth County, New Jersey. In order to procure certain unskilled labor to assist in the operation of the hotel, defendant has, at times, had two employment agencies located in Philadelphia, Pennsylvania, send prospective employees to Asbury Park, said employment agencies being unlicensed by the State of New Jersey. As a prerequisite to the receipt of a reference for employment by the defendant, the employment agencies have had the prospective employees sign assignments of their future wages. These assignments are for the amounts to be recovered by the employment agencies for their service fees and for any advancements made by them to prospective employees in order to cover the cost of transportation from Philadelphia to Asbury Park.
Upon arriving in Asbury Park, prospective employees have gone to the defendant's place of business and voluntarily given the references and wage assignments to agents of the defendant, in return for employment. In the latter part of 1961 and part of 1962, the defendant honored seven such wage assignments for employment agency fees, deducted the amounts due thereunder from the wages then due certain employees, and remitted the deductions to the employment agencies."
The crucial issue herein is whether an employer violates N.J.S.A. 34:11-4 when he honors an assignment of wages
voluntarily executed by an employee in favor of an employment agency in payment of obligations due the agency by the employee. These obligations are the moneys advanced by the agency to the employee to pay his transportation to the place of employment and the fee to which the agency is legally entitled for having procured the job for him.
It is to be noted at the outset that these debts from the employee to the agency arise out of a separate agreement between the employee and the agency to which the employer is not a party, rather than out of any direct agreement between the employer and the employee. The employer's recognition of the agency's legal rights under the voluntary assignment is not an agreement as to wages between the employer and employee. Therefore, we deem inapplicable to the facts herein those portions of N.J.S.A. 34:11-4 which make unlawful, null and void an agreement between the employer and the employee "for the payment of wages," otherwise than as provided by this act.
The position of the Department of Labor and Industry is that N.J.S.A. 34:11-4 prohibits employers from making any deductions from the wages due their employees unless such deductions are statutorily authorized. It points to the first few words of the section, "Except as otherwise provided by law," as justification for its contention. The Department acknowledges that any deductions which, by federal or state law, an employer is required or authorized to make, may be considered as implied exceptions to the "full amount of wages" provision of N.J.S.A. 34:11-4. In this category it places N.J.S.A. 43:21-7(d)(1) and N.J.S.A. 43:21-33, allowing employers who qualify for coverage to withhold from wages earned such amounts as are required by the Unemployment Compensation and Temporary Disability Benefits Laws; N.J.S.A. 52:14-15.9a, permitting deductions from the pay of government employees for group insurance premiums; N.J.S.A. 52:14-15.9c, authorizing deductions from the pay of public employees for their contributions to the United Fund, the Community Chest, or
United Appeal; N.J.S.A. 52:14-15.5, permitting deductions from the pay of government employees for United States bonds; N.J.S.A. 34:11-33.6, allowing deductions for taxes due a foreign jurisdiction under special circumstances. Withholding taxes for federal income tax purposes is another instance of a deduction required by law.
The Department concedes that voluntary assignments of wages are valid, in the absence of a statute prohibiting them. It cites Rodijkeit v. Andrews , 74 Ohio 104, 77 N.E. 747 (Sup. Ct. 1906). It does not dispute the validity of the assignments herein, as such. It also agrees that there is no New Jersey statute which generally precludes or invalidates assignments of wages, either past-due or to be earned in the future. In fact, some wage assignments are expressly sanctioned by our laws. N.J.S.A. 17:13-42 allows assignments of future wages to not more than 10% thereof to be made by members of credit unions as collateral for loans, and the employers of such members are permitted to pay such assignments. N.J.S.A. 17:10-17 and 18 authorize assignments of wages for the payment of loans due small loan companies, subject to the limitations and conditions therein expressed. On the other hand, N.J.S.A. 34:11-25 and 26, saved from repeal by N.J.S.A. 12A:10-104, make it a misdemeanor for any person to have assigned to him any wages due, or to become due, to any employee, upon which the assignee shall have received or contracted to receive from such employee more than ...