New Jersey to Take Action Against Misclassification of Employees
In May of 2018 the Murphy Administration and the New Jersey Department of Labor established a Task Force to investigate the misclassification of employees in New Jersey. Earlier this month, they released a shocking report not only detailing the extent of misclassification of employees but also, making recommendations on taking immediate legislative action to fix it.
According to the report, 12,315 New Jersey workers have been misclassified as “independent contractors”, requiring them to obtain LLC’s, or as “off the books” by their employers, cheating them out of benefits like paid sick leave, wage and hour protection, and unemployment benefits. In doing so, companies were able to issue these workers a 1099 Tax Form, which essentially reports payments made to a non-employee. Companies benefitted from this because it allowed them to avoid paying taxes and contributing to unemployment and disability benefits.
Currently, there is a legal requirement to rightfully classify workers in New Jersey. However, there are plenty of jobs that do not follow this requirement. In fact, the industries that are hit the hardest by this are home care, trucking, transportation, construction, janitorial services, and other labor-intensive services where employers are incentivized to keep labor costs low.
The Task Force outlines several steps the Murphy Administration and the Department of Labor can take to combat that misclassification of employees. They suggest informing the public and providing them with a way in which they can report misclassification and requiring companies to post notices informing workers of their rights. Also, strengthening state contracts to maintain that misclassifying employees will cause the company to lose future opportunities for state contracts and funding. As well as possible legal criminal action against company owners and overseers who are consistently breaking this law.
New Jersey employees who feel that they are being misclassified should seek an attorney to evaluate their case. The attorneys at Vlasac & Shmaruk are experienced in this very subject and will be happy to speak to you about your rights as an employee or an independent contractor. Please give us a call to schedule a free case evaluation with a knowledgeable attorney.