Worker misclassification bills approved in Senate; freelance measure delayed

Legislative leadership is scrapping plans to push through a controversial measure that would reclassify freelance workers as employees, but is nonetheless moving forward with a series of other similarly-goaled bills.

Senate President Stephen Sweeney, D-3rd District, told reporters Thursday he would can efforts to get Senate Bill 4204 – aimed at curtailing worker misclassification – through before the end of the current voting session on Jan. 14.

“I did exactly what I said I was going to do. I said we weren’t rushing it through,” Sweeney, the measure’s main sponsor, told reporters during a Thursday afternoon voting session.

To reign in misclassification, wherein regular employees are improperly classified as independent contractors so that employers can skip out on employment taxes and other worker protections, S4204 would have originally reclassified tens of thousands of freelance “gig economy” workers as regular employees — and was worded so that it would affect workers for ride-hailing services like Uber or Lyft and food delivery services like DoorDash.

Since its introduction in November, S4204 has been hotly debated and was the subject of intense controversy and opposition.

“We took four hours of testimony, we’re looking at testimony and making amendments,” Sweeney added on Thursday. “We’re not looking to hurt legitimate independent contractors.”

But the new legislation was changed so that it would codify into state law the Murphy administration’s current interpretation of the law, which has been dramatically ramped up in recent months.

If they’re afraid, if they’re so nervous about this independent contractor law, they should check if they’re breaking the law right now.

In November, state labor officials used the existing ABC test – which differentiates freelance workers from regular employees – to rule that ride-hailing company Uber owed the state more than $640 million in employment taxes because it wrongly classified drivers as freelancers, rather than employees. Since then, labor officials have upped enforcement of worker misclassification laws — levying fines against violators, and then naming and shaming via press releases.

“What we’re doing is codifying what they do today at the [Department of Labor],” Sweeney said. “If they’re afraid, if they’re so nervous about this independent contractor law, they should check if they’re breaking the law right now.”

A flurry of worker misclassification bills are also moving through Trenton.

One measure, Assembly Bill 5838, would let the state labor department issue a “stop-work order” against businesses who have been found violating the state’s wage and hour laws by misclassifying workers. It received Assembly approval on Dec. 16 and Senate approval on Jan. 9; it now heads to the governor’s desk.

A second measure, Assembly Bill 5839, levies fines against employers who misclassified workers. The measure passed the Assembly last month, and is scheduled for a Senate vote on Jan. 13.

Also on its way to the governor’s desk, Assembly 5840, which would make both the employer and any labor contractor they use jointly responsible for worker classification.