Earlier this year, Governor Murphy signed several new laws that starkly increased employer liability for misclassifying workers as independent contractors rather than as employees. The comprehensive enactment included a provision requiring employers to conspicuously post a Notice designed to educate workers regarding potential misclassification. The New Jersey Department of Labor recently released the model Notice, which can be accessed at https://www.nj.gov/labor/forms_pdfs/lsse/mw-899_520_missclassification11x17.pdf.
- Alerts workers to the statutory rights, protections and benefits they may lose if improperly classified as independent contractors, such as minimum and overtime wages, and monetary benefits for unemployment, disability, family leave, earned sick leave and workers’ compensation.
- Delineates the “ABC test” for determining independent contractor status under a wide range of New Jersey wage and benefits statutes. Under the test, an employer must prove that: (A) the worker’s services are provided free of control or direction; (B) the service is either outside the usual course of business, or is performed outside all the places of business, of the business/enterprise for which the service is performed; and (C) the worker is customarily engaged in an independently established trade, occupation, profession or business.
- Educates employees regarding the burden of proof regarding independent contractor status, i.e. that they are presumed to be employees unless the employer proves all three prongs of the “ABC test.”
- Highlights that receiving a 1099 form or signing an “Independent Contractor Agreement” is not dispositive of their actual status as an independent contractor vs. employee.
- Outlines some remedies (such as back pay) available to workers who have been misclassified, as well as the potential penalties imposed on employers for misclassification.
The Notice also provides contact information for securing additional information, instructs workers where they can file a misclassification claim, and reassures workers that they cannot be retaliated against for reporting potential misclassification.
The Labor and Employment attorneys at Connell Foley LLP are available to assist employers in evaluating the proper classification of current workers or new hires.