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.
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.