[co-author: Shannon Finnegan, Law Clerk]
Constructing on efforts that started in early in his tenure, Governor Murphy of New Jersey lately signed 4 payments into legislation that broaden the ability of the state to determine and fight alleged employee misclassification.
On July 8, Governor Murphy signed 4 payments into legislation which might be meant to assist the state determine and penalize employers who misclassify workers as impartial contractors:
- A-5890/S-3920 imposes extra administrative constraints on and penalties for employers. One distinguished approach is by enhancing using stop-work orders. As an illustration, as soon as a stop-work order is last, employers should pay workers for the primary ten days of labor they lose due to that order. As well as, a stop-work order might now be deemed last if an employer fails to request an enchantment inside 72 hours. Moreover, if an employer fails to pay wages owed, the Commissioner might assess a civil penalty of US$5,000 per day for every day that the employer conducts enterprise operations which might be in violation of the stop-work order. This legislation took impact instantly upon passage.
- A-5891/S-392, which additionally was efficient instantly on passage, creates a brand new workplace, the Workplace of Strategic Enforcement and Compliance, to coordinate with different state companies to assist implement state wage, profit, and tax legal guidelines. Amongst different issues, this workplace will preliminarily evaluation any enterprise looking for state help to make sure it’s complying with relevant wage and different legal guidelines.
- A-5892/S-3922 is meant to “streamline[ ] the identification of worker misclassification” by facilitating data sharing between numerous state companies, and by making it a violation of the New Jersey Insurance coverage Fraud Prevention Act to misclassify workers for the aim of evading insurance coverage premium funds. This legislation takes impact on January 1, 2022.
- A-1171/S-1260 creates a statewide, publicly accessible database of payroll data that contractors are required to undergo bid on public works initiatives. This legislation additionally takes impact on January 1, 2022.
These legal guidelines proceed efforts to deal with employee misclassification that Governor Murphy started as early as Might 2018 when he created his Misclassification Task Force, which paved the way in which for his first spherical of misclassification legal guidelines in January 2020 (A-5839; A-5843; A-5840; and A-5838), which additionally strengthened enforcement efforts and laid the groundwork for the 2021 legal guidelines.
In view of this current laws, New Jersey employers ought to re-examine their impartial contractor agreements, enterprise fashions, and insurance policies to make sure that they aren’t in danger for legal responsibility beneath these new legal guidelines.