New Jersey Law Prohibits Worker Missclassification

New Jersey adds new section to its Labor Law Poster:

Prohibiting Worker Misclassification (June 2020)

  • The new notice defines worker misclassification, as well as the designations of ‘Employee’ and ‘Contractor’ under New Jersey Law.
  • People who work and are paid are assumed to be employees unless the employer can establish all three parts of the ‘ABC’ test. This is the case regardless of whether the employee received a 1099 or W-2, or if an employee signed an independent contractor agreement.
  • The law states that the burden to prove who is or is not an employee falls on the employer.
  • The notice lists penalties for violations of the law.
    • A penalty of no more than 5% of the worker’s gross earnings over the last 12 months, paid by the employer to the misclassified employee.
    • A penalty of up to $250 per misclassified employee for the first violation, then $1000 per misclassified employee for subsequent violations.
    • The imposition of stop-work orders, suspension or revocation of a license or licenses held by the employer, or additional penalties and fees paid to the Department and to the misclassified employees.
  • Employees are protected from retaliation from their employer if they make an inquiry or complaint regarding worker misclassification.
  • Information for reporting worker misclassification can be found at the bottom of the notice.

We are publishing a new New Jersey (NJ) labor law poster that includes these mandatory updates.

Visit the  New Jersey labor law poster  page to purchase the latest poster OR call 1-800-322-3636.


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