NJ Law Protects Gig Economy Workers from Exploitation & Wage Violations
In an effort to support and protect New Jersey workers from exploitation, state Legislators passed a new legislative package designed to reform the “gig economy” employee misclassification by forcing contracting companies to classify independent contractors as employees and provide benefits for them. These laws would allow stop-work orders against employers violating state wage, benefit, and tax law, assess penalties for violations in connection with misclassification of employees, and among others, require employers to post a notice for their employees regarding employee misclassification.
The rising misclassification claims by gig employees has meant increased workers’ comp and personal injury claims as well as more tax revenue, as companies are forced to pay more towards their employment and disability contributions. In a 2018 audit, the New Jersey Department of Labor reported that supposed misclassification and underreported wages resulted in a claimed income tax revenue loss of $462 million.
Being misclassified as an independent contractor can put you or someone you love, in a difficult position and in the long-run cost you more than just lost wages. If you have been classified as an independent contractor, but believe you really are an employee, New Jersey employment rights attorneys at Chamlin, Uliano & Walsh can help you.
What is Worker Misclassification in New Jersey?
According to New Jersey Governor Phil Murphy’s Task Force on Employee Misclassification this strategy is one of the means by which businesses attempt to gain a competitive advantage by reducing labor costs. Employee misclassification is the illegal and improper practice of employers classifying their workers as “independent contractors” rather than “employees.” As independent contractors, these individuals are not entitled to the same rights as regular employees, such as wage and hour protections, workers compensation, job-protected family medical leave, paid sick leave, unemployment benefits, as well as protection under state and federal anti-discrimination laws; and to organize under the National Labor Relations Act. This difference in wage violations also extends to different tax classifications.
According to Labor Commissioner Robert Asaro-Angelo, “misclassification is especially prevalent in construction, janitorial services, home care, transportation, trucking and delivery services, and other labor-intensive, low-wage sectors.”
Governor Murphy believes employee misclassification and wage violations “hurts hardworking New Jersey workers and prevents them from receiving the benefits and the pay they worked for and deserve.”
Do you believe your employer has committed a wage violation or you’ve been misclassified? An experienced employment lawyer can help you make this determination.
Been Classified as an Employee or an Independent Contractor? Take NJ’s ABC Test
While each working situation is unique and depends on a careful examination of your working relationship, the Wage & Hour Division of the New Jersey’s Department of Labor has a few criteria (for wage and hour and unemployment law purposes) to assess if a worker has been appropriately classified. Under New Jersey’s ABC test, the employer must establish the following elements to demonstrate that a worker is an independent contractor (rather than an employee):
- operate without the direction of control from the company they contract with,
- the service they provide is outside of the contracting company’s typical line of business, or workplaces, and
- operate as an independently controlled business, occupation, profession, or trade
Failure to establish at least one of these elements will result in the finding that the individual is not an independent contractor but in fact an employee.
If you have been erroneously classified as an independent contractor by the company you work for, you may be able to recover compensation for Medicare and Social Security taxes you’ve paid as self-employment tax, wage underpayment, overtime pay, and much more.
What if I Signed a Work Contract?
Signing an agreement whether as an employee or independent contractor, does not change the realities of your work situation. If you are an employee, you cannot sign away your right to basic employment rights, minimum wage, overtime, family medical leave, or unemployment benefits.
Employers are notorious for trying to get out of labor law requirements through contracts. Whether you’re an independent contract or an employee, you have rights protected by state and federal laws. When your client or employer violates these rights, you have legal recourse.
Ocean County, NJ Misclassification and Employment Lawyers
Various rights and protections are afforded to employees by NJ state and federal laws. Experienced attorneys can tell you if you have been denied any of your employment rights under these laws.
You may have been misclassified, underpaid, denied your tips or overtime pay, discriminated against, blatantly or less obviously, and you deserve justice. Depending upon the specific circumstances of your situation, you may have a claim.