February 2024

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New Jersey expands worker misclassification protections

03/05/20

Author: ADP Admin/Wednesday, March 4, 2020/Categories: Compliance Corner , State Compliance Update, New Jersey

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.

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