In early 2020, New Jersey Governor Phil Murphy signed a series of bills aimed at identifying and penalizing entities for misclassification of employees as independent contractors. Yesterday, Governor Murphy signed four additional laws into effect to build upon and expand these efforts: A5890, A5892, A5891, and A1171.

These laws build upon prior efforts, with a notable focus on the expanded information sharing and inter-agency coordination to identify and combat misclassification of workers:

  • A5890 creates a mechanism for the state to combat worker misclassification through litigation for alleged violations of any wage, benefit, or tax law, and provides additional penalties for the enforcement of stop-work orders, including the ability to assess a civil penalty in an amount the commissioner deems appropriate, the requirement for employers to pay employees for the first ten days of the stop-work order, and the ability of the state to sue on behalf of the employees for non-payment of such wages.
  • A5892 facilitates additional information exchange between state entities to identify misclassification, including the Department of Labor, the Bureau of Fraud Deterrence, and the Commissioner of Banking and Insurance.
  • A5891 creates an Office of Strategic Enforcement, funded with one million dollars, to coordinate strategic enforcement of wage, benefit, and tax laws across state agencies.
  • A1171 creates a public database of certified payroll information for all public works projects.

Independent contractor misclassification has been a focal point throughout the Murphy administration, although the issue took a backseat as the State dealt with the COVID-19 pandemic. As the State continues to rebound from the pandemic, the administration is again re-focusing on these issues. We expect to see aggressive action from the State pursuing alleged misclassification of workers.

If you have any questions about the classification of your Company’s workers, Reed Smith’s experienced Labor & Employment team is available to assist.