Gov. Murphy signed legislation to protect workers from misclassification

In an effort to assure that workers and employers in New Jersey are treated with justice, Governor Phil Murphy today signed a four-bill legislative package to stop employee misclassification.

“Workers who are misclassified as independent contractors miss out on fair wages and benefits,” said Governor Phil Murphy. “These business practices are unfair, abusive, and illegal and they cannot be tolerated. Today’s action will give the state more tools to root-out and prevent misclassification. I am honored to sign these bills today on behalf of New Jersey’s workers.”

You can read: NJ students now are eligible for 4 years of free tuition

Misclassification is the practice of illegally and improperly classifying employees as independent contractors. This illegal practice deprives workers of the right to earn minimum wage and other benefits like overtime, workers’ compensation, unemployment, earned sick leave, job-protected family leave, temporary disability, and equal pay, and leaves them unprotected against discrimination.

On the other hand, it also hurts the majority of employers who play by the rules, by putting them at a competitive disadvantage against those who do not follow the law.

Database to track payroll

As reported by midjersey.com, a new Office of Strategic Enforcement and Compliance within the Department of Labor (DOL) will be created and DOL will create a database to track payroll projects, critical steps to tracking and eliminating misclassification. The others bills in the package will simplify the process for identifying misclassified workers and implement stop-work orders at worksites where misclassification is identified.

“The action taken by the Governor here today will only bolster New Jersey’s workforce , the employees who deserve the protections put in place for them , and the employers who play by the rules and properly classify their workers,” said Labor Commissioner Robert Asaro-Angelo.

Tackling worker misclassification has been a priority of the Murphy Administration. In 2018, a Department of Labor audit found more than 12,300 cases of workers being misclassified, resulting in more than $460 million in underreported gross wages and $14 million in lost state unemployment and temporary disability contributions. The audit covered just 1 percent of businesses, suggesting that the real cost of misclassification is higher.