New Jersey Passes Laws to Protect Workers from Illegal Misclassification as Contractors

On January 20, 2020, New Jersey passed several new laws aimed at protecting workers from being denied the benefits of employment through misclassification as independent contractors. The laws were passed to rectify the problem of employers treating workers who work 40 hours a week for them as independent contractors. Right now, employers have an economic incentive to misclassify workers as contractors. For example, they can save money by misclassifying a worker as an “independent contractor” to deny the worker the health and retirement benefits provided to employees. These new laws seek to reduce the practice of employers misclassifying workers as contractors when they truly should be regarded as employees.

The new laws make employers and staffing agencies jointly liable for misclassifying workers. The law expressly states that “any person acting on behalf of an employer, including a client employer or labor contractor,” who violates any state wage and hour law or employer tax law may be held liable as the employer for that violation. This is an important aspect of the new laws because employers frequently misclassify workers who work 40 hours a week as “independent contractors” solely because those workers are provided by a staffing agency. By providing joint legal responsibility for violations, the law hopes to reduce illegal misclassifications.

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