Legislation targeting independent contractors has been signed into law by Governor Phil Murphy.
Although sold as legislation addressing “wage theft”- simplefailure to pay agreed-upon lawful wages – the legislation was designed to deter the use of independent contractors. This legislation criminalizes misclassification and other wage and hour violations – 3-5 years in jail – including good faith violations. Businesses also face 6 years’ treble damages and joint and several liability, with the same treble damages, for contractors’ violations – liability for behavior they do not control.
Other states like California are looking to deter the use of independent contractors by adopting a more stringent version of the ABC test – making it more difficult for businesses to prevail in court. New Jersey takes a different approach. The risk of massive financial penalties and even significant jail time mean the ABC analysis is whatever the Department of Labor says it is.
NJCJI continues to work with an array of businesses and other trade associations to address the significant overreach of this legislation. The Wage and Hour Fairness Coalition includes 40 trade associations and other business organizations in the state.
Please contact Alida Kass if you would like to discuss this effort.
The Governor’s Misclassification Task Force Report spells out the administration’s agenda in detail. Notably absent is any recognition of the flexibility that the independent contractor model provides for workers and businesses alike, and the critical role in plays in the economy. Similarly, no concern that the extraordinary penalties contemplated in the report might risk over-deterring a valuable business model.
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