In May of 2018, Governor Murphy signed Executive Order 25, which created a Task Force to provide advice and recommendations on how to fight employee misclassification. More specifically, many employers in the State are erroneously classifying full-time employees as independent contractors so as to avoid providing these employees with benefits to which they are entitled including, but not limited to, paid sick leave, unemployment insurance, workers’ compensation, and disability benefits. It also deprives these employees of protection under labor laws, as applicable, as well as occupational safety laws. Moreover, misclassification results in employers failing to pay required State and Federal taxes. The Executive Order cites to an estimate that over $500 million dollars in yearly tax revenue is not provided to the State as a result of employee misclassification.
The Task Force will be charged with a number of responsibilities to combat employee misclassification, including:
Examining and evaluating existing misclassification enforcement by executive departments and agencies;
Developing best practices by departments and agencies to increase coordination of information and efficient enforcement;
Developing recommendations to foster compliance with the law, including by educating employers, workers, and the public about misclassification; and
Conducting a review of existing law and applicable procedures related to misclassification.
The task force will be made of at least 12 members, with a composition of: 3 members from the Department of Labor and Workforce Developments; three members from the Department of the Treasury; and one member from the Department of law and Public Safety, Department of Agriculture, Department of Banking and Insurance, Department of Human Services, Department of Transportation, and Economic Development Authority, respectively.
According to the Governor, “The exploitation of workers is not only unethical – it is illegal . . . In New Jersey, we promote fairness, fight against discrimination, and work to end unfair labor practices. I am proud to take this step forward to end a practice that creates an unfair advantage over companies that play by the rules and hurts our working families.”
If you have any concerns about employee misclassification in the State, the experienced attorneys at the Zazzali Law Firm are available to answer any questions you may have.