Six bills were approved by the Assembly Labor Committee Monday addressing the improper classification of workers as independent contractors rather than employees.
The bill package stems from recommendations made by the Governor’s Task Force on Employee Misclassification in July, which found that employee misclassification has increased 40 percent in 10 years.
Sponsors of the bills in the package include Assembly members Wayne DeAngelo, D-14th District; Nicholas Chiaravalloti, D-31st District; Paul Moriarty, D-4th District; Shanique Speight, D-29th District 29, Anthony Verrelli; D-15th District, Linda Carter, D-22nd District; and Clinton Calabrese, D-36th District.
The bills addressed the following concerns:
- Assembly Bill 5838, sponsored by DeAngelo, concerns stop-work orders related to misclassification of employees;
- Assembly Bill 5842 sponsored by Chiaravalloti and Moriarty, concerns tax data sharing between State Treasury and DOLWD;
- Assembly Bill 5843, sponsored by Speight, Verrelli, and Moriarty, requires employers to post notice for employees on employee misclassification;
- Assembly Bill 5839, sponsored by Moriarty, Verrelli, and DeAngelo, requires an employer to pay misclassification penalties if found to have violated State wage, benefit, and tax laws;
- Assembly Bill 5840, sponsored by Carter and Moriarty, concerns joint liability for payment of employer tax law; and
- Assembly Bill 5841, sponsored by Calabreseand Verrelli, creates a new list for employers found in violation.
“Classifying workers as independent contractors as an alternative to full or part-time employment has been a grossly misused practice of misclassification,” said a joint statement by the sponsors. “It hurts employees and their families who do not have access to critical benefits and protections they are entitled to by law, including minimum wage, overtime compensation, family and medical leave and unemployment insurance. It also hurts each of the taxpayers and businesses paying their fair share while others avoid their tax duties.”
Misclassification not only hurts workers and businesses, but the state, too, according to a release by the Assembly Democrats.
A 2000 U.S. Department of Labor and Workforce Development study of misclassification in construction in New Jersey found that the misclassification of construction employees resulted in state income taxes not being paid for up to $11 million in off-the-books employment, and nearly $9 million from employment of misclassified workers.