MADDEN BILL PACKAGE ADDRESSING EMPLOYEE MISCLASSIFICATION CLEARS SENATE

Trenton – A bill package sponsored by Senator Fred Madden that would continue New Jersey’s efforts to combat employee misclassification was approved by the Senate.

“I am proud to continue our work in strengthening the protections for our dedicated workers against unscrupulous contractors here in New Jersey,” said Senator Madden (D-Camden/Gloucester), chair of the Senator Labor Committee. “Any employer who actively works to undercut the earnings of someone’s hard work for the sole purpose of increasing personal profits must be held accountable f0r their deception. This package of bills provides greater powers to facilitate this process, and aims to dissuade others from causing further untold social and economic costs for our middle-class families.”

The three-bill package builds on a six-bill legislative package to address worker misclassification that was signed into law in January 2020.

The first bill, S-3920, would provide the Commissioner of Labor and Workforce Development (LWD) greater enforcement powers in regards to violations of state wage, benefit and tax laws. It would also provide additional enforcement options in the Office of Administrative Law and in the courts through subpoena powers and injunctive relief.

Under current law, originating in the 2020 misclassification package, the Commissioner of LWD is permitted to issue a stop-work order against any employer that violates any state wage, benefit, or tax law.

This bill would permit the Commissioner to issue a stop-work order for one or more worksites, or across all the employer’s worksites. The orders remain in effect until the Commissioner finds that the employer has come into compliance and has paid any penalties assessed.

The second bill, S-3921, would create the “Office of Strategic Enforcement and Compliance” within LWD. It would oversee and coordinate across the divisions of the department and, when necessary, between the department and other state agencies and entities, for strategic enforcement of state wage, benefit, and tax laws, as deemed appropriate by the Commissioner.

The bill would appropriate $1 million from the General Fund to the department to support and expand the Office of Strategic Enforcement and Compliance.

The third bill, S-3922, would streamline the identification of employee misclassification. Specifically, the bill would make misclassifying employees for the purpose of evading payment of insurance premiums a violation of the New Jersey Insurance Fraud Prevention Act. The Act is currently silent on misclassifying employees as a form of insurance fraud.

The bill would specify penalties for fraud when misclassification occurs as $5,000 for the first violation, $10,000 for the second violation and $15,000 for each subsequent violation.

The bills were released by the Senate with a vote of 26-9, 33-2 and 25-10, respectively.