There are many employers who try to exploit their workers by classifying them as contractors rather than employees. This means the employer is not required to offer them benefits, can force them to pay a bigger share of their taxes, and removes some protections for them. In New Jersey, there are new laws designed to prevent this from happening and ensure that the right workers are counted as employees rather than contractors.
New NJ Laws
There are several important aspects to the new laws on the books. The laws create a new office in the department of labor that is in charge of enforcing and overseeing all wage, benefit, and tax laws. The law also mandates a public and certified payroll database for all public works projects that are carried out in the state.
Other parts of the laws are related to misclassifying employees as contractors. One of these focuses on the insurance side– misclassifying to get away with not providing insurance is now a criminal violation of New Jersey’s insurance fraud laws, with appropriate penalties. Likewise, the laws also empower the Commissioner of Labor to force companies misclassifying their employees to stop work– while still paying their workers. They can also impose injunctions and other penalties on such businesses.
These four new laws are designed to help the state government of NJ crack down on employment fraud and other violations with a special eye towards misclassification. This is a growing issue, especially with the rise of the gig economy, and it is getting an increased amount of attention from regulators at all levels of government in recent years.