Current Events

Thursday, January 2, 2020

NJ Independent Contractor and Employee Classifications under New Senate Bill

Many workers feel that they are in a gray zone as to their job classification as to whether they are an independent contractor or employee. As the classification relates to whistleblower to discrimination laws, even an employer’s failure to withhold Federal or State income taxes, pay unemployment compensation contributions or workers' compensation premiums will not necessarily be determinative as to whether the workers are covered under the protection of state whistleblower and discrimination laws.

A new Senate bill proposes to tighten the definition of independent contractor for clarity for both employers and employees. This was prompted by rampant abuses by some employers who did not classify workers as employees so as to not have to adhere to NJ Wage and Hour Laws, not contribute to the workers’ social security and other benefits, and not have the workers be covered under the safety umbrella of employee protection statutes. The language of the proposed amendment however will not necessarily end the confusion as to the proper classification in many industries and may actually add to the confusion in some instances.

The new bill S-4204/A-5936, introduced in the Senate in November of 2019, sponsored by Sen. Stephen Sweeney, seeks to alter the definition of an independent contractor under the NJ Wage and Hour Law and the NJ Wage Payment Act. It altered the “b.)” section of a three-part test. It removed the “either” and “or” in part b.) section: the individual’s service is [either] outside the usual course of the business for which the service is performed[, or the service is performed outside of all the places of business of the employer for which the service is performed].

The proposed changes in part to define “independent contractor”, are as follows with the “either” and “or” deleted from part b.) section:

“Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 1.    (New section)  For the purposes of all State employment laws, individuals who perform services for remuneration shall be deemed employees, not independent contractors, and shall be subject to the provisions of those laws, and shall be entitled to all rights and remedies provided by those laws, unless and until it is shown to the satisfaction of the Commissioner of Labor and Workforce Development that:

a.     The individual has been and will continue to be free from control or direction over the performance of the service, both under the individual’s contract of service and in fact; and

 b.    The individual’s service is outside the usual course of the business for which that service is performed; and

c.     The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the work performed."

It is still untested how the new amendment will affect various parts of the recently passed New Jersey Wage Theft Act which effects both NJ civil statutes and criminal Statutes. Three amended statutes affected by New Jersey Wage Theft Act are: 1) the New Jersey Wage Payment Law, N.J.S.A. 34:11-4.1, et seq., 2) the New Jersey Wage and Hour Law, N.J.S.A. 34:11-56a, et seq., and 3) the New Jersey Wage Collection Law, N.J.S.A. 34:11-57, et seq.

NJ Courts have applied different tests derived from numerous sources to distinguish between an independent contractor and employee and thereby determine which workers fall within the protection of various remedial statutory provisions. What is considered to be an independent contractor under some statutes may be determined to be an employee under others. One thing that is clear is that an employer’s failure to withhold federal or State income taxes or to pay unemployment compensation contributions or workers' compensation premiums with respect to an individual's wages shall not be considered in making a determination under this amended section.

Do not sit on your rights, or you may lose the right to file your claim.

If you have not been paid properly or are a whistleblower or other worker and your employer tells you that you are an independent contractor and not covered under the NJ employee statutes, such as the Whistleblower Law, the Law Against Discrimination, Unemployment Compensation law, Workers’ compensation law, Wage and Hour Law and Wage payment law, etc., you should contact this office. If you think you have been retaliated against for asserting your legal rights, it is essential for you to contact an experienced, aggressive and successful employment discrimination and whistleblower attorney who will be aggressive about enforcing your rights as soon as possible.

If your employer did not pay you overtime, or you have been demoted, had your hours cut, terminated, harassed or been subjected to retaliation for complaining about, objecting to, refusing to participate in, or reporting what you believe is your employer’s illegal or improper conduct or wage payment, you should contact this law firm as soon as possible. I am an experienced, aggressive and compassionate employment attorney who will be aggressive about enforcing your rights.  I am successful in bringing employment retaliation, discrimination and whistleblower lawsuits and recovering money for workers.

If you are being subjected to such unlawful workplace acts or retaliation, contact Hope A. Lang, Attorney at Law today for a free consultation. I accept whistleblower and discrimination cases from all over New Jersey.

New Jersey employment attorney, Hope A. Lang, Attorney at Law serves clients throughout the state, including Bergen, Middlesex, Essex, Hudson, Monmouth, Ocean, Union, Camden, Passaic, and Morris Counties with locations in Southern, Central, Western and Northern NJ to meet with clients.


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