New Jersey’s Misclassification Package Creates More Protections for Workers
On January 20, 2020, New Jersey Governor Phil Murphy signed into law six bills geared toward protecting self-employed workers. The “Misclassification Package” to which the new laws are referred, expands the Department of Labor (DOL)’s compliance and enforcement tools, and creates new penalties for employers that misclassify their workers as independent contractors instead of employees. This new legislation has been enacted in the wake of a recommendation from the Task Force on Employee Misclassification, which was established by an executive order signed by Governor Murphy in May 2018. The Misclassification Package includes the following laws, which are summarized below. A5838 – Stop-Work Orders. Pursuant to A5838, the DOL Commissioner is authorized to issue stop-work orders against employers where any State wage, benefit or employment tax law violation is found pursuant to an audit or investigation. Procedurally, the Commissioner is required to serve notice of intent to issue the stop-work order at least seven days before the order is issued. Once in effect, the stop-work order requires cessation of all business operations, and remains in effect until the Commissioner determines that the employer has come into compliance and has paid any penalties, or the Commissioner finds in a hearing that the employer did not commit the act on which the order was based. Employers that operate...