New Jersey Employee Misclassification Task Force

New Jersey Governor Phil Murphy has signed an executive order that will establish a Task Force on Employee Misclassification. Governor Murphy signed the executive order at the Apprentice Training Center of the Northeast Regional Council of Carpenters (NRCC). The NRCC applauded the move as supporting law-abiding businesses and protecting workers from exploitation.

When an employer misclassifies a worker as an independent contractor, they do not have to pay worker benefits such as Social Security, Medicare, unemployment insurance, overtime, or Workers’ Compensation. By doing so they also cheat the federal and state governments out of tax revenue.

New Jersey’s Underground Construction Economy

In 2016 Stockton University released a study that found that New Jersey has an underground construction economy worth between $528 million and $1.2 billion. There are some 35,000 construction workers in New Jersey who are either misclassified as independent contractors, or being paid under the table in cash, for a total of between $284 – $528 million in underground wages. The state of New Jersey misses out on close to $9 million from workers who are misclassified and $11 million in off-the-books employment.

Exploitation of Workers

In announcing the new task force, Governor Murphy stated that besides being unethical, exploitation of workers in this way is illegal. He declared that by establishing this task force, New Jersey will work to end unfair labor practices that disadvantage companies who play by the rules.

Labor Commissioner Robert Asaro-Angelo said that misclassification of employees allows employers to ignore their obligation to provide a safe workplace and prevents workers from accessing employee assistance programs.

Task Force on Employee Misclassification

The new task force will be made up of at least twelve members. The Department of Labor and Workforce Development and Department of the Treasury will each have three representatives. The Departments of Law and Public Safety, Agriculture, Banking and Insurance, Human Services, Transportation, and the Economic Development Authority will each have one representative.

The responsibilities of the task force include examining and evaluating existing misclassification enforcement within executive departments and agencies; developing best practices to increase coordination of information by departments and agencies and improving the efficiency of enforcement; developing recommendations to improve compliance such as educating the public, employers, and workers about the classification of employees; and conducting a review of the existing laws and procedures regarding misclassification.

Misclassification Hurts the State Economy

Attorney General for the State of New Jersey, Gurbir Grewal, spoke to the greater effects of employee misclassification, saying that New Jersey’s communities end up poorer in the long run when workers are denied the wages and benefits to which they are legally entitled. Without them, the economy cannot prosper.

Cherry Hill Employment Law Lawyers at McOmber McOmber & Luber, P.C. Provide Experienced Counsel on Employee Classification Laws

Contact a knowledgeable Cherry Hill employment law lawyer at McOmber McOmber & Luber, P.C. if you have questions about employee classification. Whether you are an employer concerned about compliance or an employee uncertain of your status we can help. Call our Red Bank office at 732-842-6500, our Marlton office at 856-985-9800, our Newark office at 973-878-9040, or contact us at 888-396-0736 or online for a free consultation. We represent clients throughout New Jersey.