New Jersey Governor Phil Murphy is Zeroing in on Worker Misclassifications

New Jersey politicians, employers and attorneys alike agree worker misclassification has been an emerging problem in the Garden State for quite a while.  Complicating matters is the rise of gig economy work.  As time progresses and we transition to work shaped by technology, that many more workers are classified as contractors even though these individuals meet the legal standards necessary to be defined as employees.

Countless employers in New Jersey and beyond intentionally misclassify workers as contractors to save money.  However, this misclassification steals money and benefits from workers as well as the state of New Jersey.  From a worker’s perspective, misclassification results in the loss of key employee entitlements including but not limited to:

• Employer-paid health insurance
• Employer payments into Social Security
• Overtime pay
• Paid time off
• Job-covered family leave
• Workers’ compensation benefits

Governor Murphy insists the misclassification of workers cost the state’s employees an incredible $46 billion in 2018 alone.  This figure represents the total amount of lost benefits and wages.  The misclassification also prevented the state from obtaining millions of dollars in income tax, unemployment and disability contributions owed by employers.

Taking Action on the Misclassification Problem

Governor Murphy has formed a specialized task force to pinpoint instances of worker misclassification throughout the entirety of the state.  The task force audited merely 1% of all the state’s businesses this past year.  Though this audit was limited, it found in excess of 12,000 employers improperly classified workers.  The Department of Labor reports workers in these specific industries are particularly vulnerable to misclassification:

• Construction
• Home care
• Transportation
• Janitorial services

Unfortunately, the federal government’s enforcement of worker classification has not been as stringent as most expect.  As a result, employers lack the incentive necessary to classify workers in the appropriate manner.  This unfortunate situation has spurred Governor Murphy to sign new legislation into law to bolster the state’s Department of Labor’s ability to penalize companies for improper worker classification.  The department is empowered to penalize employers with either a fine of $5,000 per day or a complete closing of the workplace.

Worried You are Misclassified?  Contact Schibell & Mennie Today

If you suspect you have been misclassified, it is important to obtain clarification with the assistance of our attorneys at Schibell & Mennie.  Proper legal classification will help you obtain workers’ compensation benefits and other assistance you need and deserve.  Reach out to our attorneys led by Richard Schibell today at 732-774-1000 to coordinate an initial consultation.

 

 

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