Earlier this year, New Jersey Governor Phil Murphy signed six bills into law targeting the improper use of independent contractors and imposing harsher penalties for misclassifying workers. On April 1, the new law’s posting and anti-retaliation provisions took effect. On May 20, New Jersey’s Department of Labor and Workforce Development issued the required notice for posting by employers.
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Background
New Jersey law guarantees certain rights, protections, and benefits to employees under its unemployment compensation, wage, temporary disability, workers’ compensation, family leave and earned sick leave laws. Workers who are improperly classified as independent contractors lack rights, protections and benefits that they would otherwise enjoy.
On January 20, 2020, New Jersey Governor Phil Murphy signed a legislative package of six bills targeting the improper use of independent contractors. The bills created greater potential liability and imposed harsher penalties for companies that misclassify employees as independent contractors. Five of the bills took effect immediately. (See our February 6, 2020 FYI.)
The sixth bill (A5843), which took effect on April 1, 2020 provided broad protections for employees who complain or testify about worker misclassification and will require employers that violate its anti-retaliation provision to offer reinstatement and to pay for any lost wages and benefits to employees affected by misclassification. The new law required employers to notify employees of their rights by posting a notice to be issued by the New Jersey Department of Labor and Workforce Development (NJDOL).
Misclassification notice
On May 20, 2020 the NJDOL issued the required worker misclassification notice to be conspicuously posted in a place or places accessible to all employees in each of the employer’s workplaces. The notice contains:
- An explanation of the prohibition against misclassifying employees as independent contractors
- The applicable standard to determine whether a worker is properly classified as an employee or as an independent contractor
- Benefits and protections for employees under state wage, benefit and tax laws
- Available remedies to misclassified workers under New Jersey law
- Employer penalties for misclassification
- Information on reporting, or filing a complaint about, worker misclassification
- Anti-retaliation protections
Employers will be subject to a fine of up to $1,000 for violating this law.
In closing
New Jersey employers should immediately post the required misclassification notice in their workplaces and review their current classification practices in light of the new law.
Volume 43 | Issue 33