BY KATHERINE LANDERGAN | 07/08/2021 12:38 PM EDT
Gov. Phil Murphy on Thursday signed into law a package of bills his office says will further New Jersey’s efforts to stop employee misclassification.
Background: Misclassification is the practice of improperly classifying an employee as an independent contractor, which the governor’s office said prevents workers from being guaranteed things like overtime, worker’s compensation and disability.
Clamping down on misclassification has been a top priority of the Murphy administration. For example, in a 2018 audit, the state Department of Labor found more than 12,300 cases of workers being misclassified.
What the bills do: Murphy signed four bills: NJ A5890 (20R), NJ A5891 (20R), NJ A5892 (20R) and NJ A1171 (20R). Under the new laws, an Office of Strategic Enforcement and Compliance will be created within the Department of Labor that will track payroll projects to better identify employee misclassification.
The governor’s office said the bills also simplify the process for identifying misclassified workers and implementing stop-work orders at sites where misclassification has occurred.
What they are saying: The New Jersey Business & Industry Association says it is particularly concerned that one of the news laws, A5890, will allow for “overbroad enforcement by the state Labor Commissioner with little oversight or control by the courts.”
“We recognize the need for the state to enforce misclassification law against truly bad actors,” said Ray Cantor, vice president of government affairs for the association. “But businesses have legitimately relied on independent contractors for decades for everything from cleaning office buildings to hauling goods across the country. These bills will have a chilling effect on those businesses who do their level best to comply with the law.
Senate Labor Chair Fred Madden (D-Gloucester) said misclassification is a growing issue in New Jersey.
“It may sound like a simple bureaucratic problem, but it is far more onerous: Misclassification results in hard-working New Jerseyans being denied basic benefits such as overtime, medical leave, unemployment insurance, and safe workplaces, and their unscrupulous employers benefit,” Madden said in a statement. “I’m confident this package of bills will go far in eradicating this practice and ensuring that our workers are treated fairly.”