Senator Madden Introduces Bills to Target Worker Misclassification

Senator Madden introduced several bills this month to target unscrupulous businesses that misclassify workers. Misclassification is the illegal practice of misclassifying workers as independent contractors instead of employees. Businesses that misclassify their workers cheat them out of benefits including earned sick leave, Temporary Disability, Workers’ Compensation, Family Leave, and more. Further, the State loses millions in tax revenue each year that such businesses would otherwise be responsible for paying.

The bills, S4226, S4229, and S4230, are part of a multi-bill package and help to hold businesses accountable in several ways:

S4226 would allow the Commissioner of the Department of Labor and Workforce Development (Commissioner) to maintain a list on its website of any person issued a final order for violation of State wage, benefit, or tax law. Such person would be given 15 business days of notice and would have the opportunity to request a hearing.

S4229 permits the Commissioner to issue a stop-work order against any employee found to be in violation of State wage, benefit, or tax law. The stop-work order would require the cessation of work at any site where a violation has been found. Work could only resume once the employer agrees to pay required wages and has paid any wages or any penalty owed. A civil penalty of $5,000 per day could be assessed against an employer that continues work in violation of a stop-work order. The bill also gives the Commissioner the authority to enter a workplace and inspect employer records.

Finally, S4239 would allow the Commissioner to assess penalties on violations of State wage, benefit, or tax law, including an administrative penalty of up to $250 for a first violation and up to $1,000 for each subsequent violation; and a penalty for the misclassified worker of not more the 5% of the worker’s gross earnings over the past 12 months. The money from the latter penalty would be given to the affected worker or workers.