New Jersey has enacted two pieces of legislation (Assembly Bill 5843 and Assembly Bill 5839) aimed at combating worker misclassification.
Assembly Bill 5843:
Assembly Bill 5843 requires employers to post a notice addressing employee misclassification by April 1, 2020. The notice must be posted in locations accessible to all employees in each of the employer's workplaces. The notice must explain:
- That worker misclassification is prohibited;
- The standard used by the Department of Labor and Workforce Development to determine if an individual is an employee or an independent contractor;
- The benefits and protections employees are entitled to under state law and the remedies available to misclassified workers; and
- Information on how workers may contact the Department's Commissioner to file a complaint pertaining to worker misclassification.
The Department will publish a notice for employers to use to meet this requirement.
Employers may not retaliate against an employee for filing a complaint or participating in a proceeding related to worker misclassification. Impacted employees may be entitled to job reinstatement, back pay and benefits, reasonable attorney fees and damages.
Assembly Bill 5839:
Assembly Bill 5839 grants the Commissioner the right to impose the following penalties on employers that violate state wage, benefit, and tax laws in connection with misclassifying employees:
- Up to $250 per misclassified employee for a first violation and up to $1,000 per each additional misclassification; and
- Up to five percent of the worker's gross earnings from the employer over the past 12 months, payable to the employee.
Compliance Recommendations:
New Jersey employers should review their procedures to ensure all workers are properly classified under federal, state and local laws. Please contact your dedicated service professional with any questions.