RENTON Governor Phil Murphy signed today a four-bill legislative package to support state efforts to prevent misclassification of employees.
The practice of misclassifying employees is illegally or improperly classifying them as independent contractors.
This practice denies workers the right to receive minimum wage, overtime, workers’ comp, unemployment, earned sick leaves, job-protected leave, temporary disability and equal pay.
It also makes them vulnerable to discrimination. Employers who follow the rules are also at a disadvantage to those who don’t.
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Today’s action will establish a new Office of Strategic Enforcement and Compliance (DOL) within the Department of Labor. DOL will also create a database for tracking payroll projects and other critical steps in tracking and eliminating misclassification.
Other bills included in the package will make it easier to identify misclassified workers, and allow for the implementation of stop-work orders at work sites where misclassification has been identified.
Since its inception, the Murphy Administration has made worker misclassification a priority. These efforts continue to build upon the substantial progress already made. A Department of Labor audit in 2018 found that more than 12,300 workers were misclassified.
This led to more than $460M in underreported gross wage earnings, $14 million in temporary disability payments and lost state unemployment, and more than $460M in underreported gross income.
This audit only uncovered 1 percent of the businesses. It suggests that misclassification can have a much greater impact on workers’ wages.
Executive decree establishing a Misclassification
Governor Murphy signed an executive decree establishing a Misclassification Task force to assess the extent of the problem, and recommend solutions. The Task Force was created through a partnership between Administration, Legislature and key labor and workforce stakeholders.
This led to new laws that increased penalties and provided enforcement tools to combat misclassification. This progress is continued today with the signing of new bills.
Workers misclassified as independent contractors miss out fair wages and benefits, Phil Murphy, Governor. These business practices are illegal, abusive, unfair and unacceptable and must be stopped.
The state will have more tools to prevent and root out misclassification with today’s action. It is an honor to sign these bills on behalf of New Jersey’s workers.
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New Jersey is the best place to work in the country, and that should be something we all celebrate. We are the state that offers the best wages, rights, and benefits, making us the most valuable state for employers.
Robert Asaro Angelo, Labor Commissioner, mike hostilo savannah ga
The Governor’s action today will only boost New Jersey’s workforce — the workers who deserve the protections put into place – and the employers that play by the rules, properly classify their employees.
Employee misclassification is a growing problem in New Jersey, and I’m happy to see additional legislation signed into law that fights this horrible practice. Senator Fred MaddenA-5891 is sponsored by Senator Labor Committee Chair,.
It may seem like a simple bureaucratic issue, but it’s far more complicated: misclassification results is that hardworking New Jerseyans are denied basic benefits such overtime, unemployment insurance, safe workplaces, as well as their unscrupulous employers receiving them. This package of bills is going to make it impossible for this practice to continue and ensure that workers are treated fairly.
Senator Troy Singleton
For too many years, contractors working for the state were less than transparent about how they pay their employees. Senator Troy SingletonSponsor of A-1171: The creation of a centrally accessible, publicly accessible database of payroll certificates will help ensure that workers receive proper wages when they work on public contracts.
This is good news for both workers and taxpayers, and I am happy to see that the measure has been signed into law.
It is important to increase the Department of Labor’s enforcement powers. We have witnessed far too many violations State wage, tax and benefit laws. Anthony Verrell, AssemblymanI.Sponsor of A-5890.
This law will increase the department’s responsibility in mitigating bad actors misclassifying employees, and reduce violations of laws that were previously enacted.
Creating a central office for coordination of workforce-related efforts will ensure greater enforcement and compliance New Jersey’s wage, tax and benefit laws, In a joint statement, Robert Karabinchak and Joseph Egan, the Assembly sponsors of A5891, said.
This office will supervise the preliminary review of any company seeking State assistance in order to ensure compliance with regulations regarding employee compensation, contributions to unemployment and benefits funds. The coordination of these efforts will ultimately prove to be beneficial to the state, employees, and law-abiding companies that need our assistance.
Misclassifying employees as independent contractors to avoid paying insurance premiums hurts hard-working people who are entitled to the same protections and benefits as company employees. Shavonda Sumter, AssemblywomanSponsor of A-5892:
Misclassification to the purpose of evading premiums will be a violation our state’s Insurance Fraud Prevention Act.
This law will also provide additional resources that will help streamline the identification and correction of employee misclassification.
Today Governor Murphy took the following steps: