Madden, Greenstein, Lagana Employee Misclassification Bill Package Passes Senate

Trenton – The final three bills of a six-bill legislative package sponsored by Senator Fred Madden, Senator Linda Greenstein, and Senator Joseph Lagana, which addresses the misclassification of employees as independent contractors by employers, passed the Senate today.

“There is no place in New Jersey for greedy contractors that cheat their workers out of hard-earned wages and benefits in order to increase personal profits and undercut their competition,” said Senator Fred Madden (D-Camden/Gloucester). “This creates untold social and economic costs for our middle-class families. We need to implement severe consequences for contractors found to be acting in bad faith while strengthening the protection for our workers throughout the state

“When employers misclassify their employees as independent contractors, the impact is not only felt in the homes of hardworking families throughout the state but in our entire state’s economy,” said Senator Greenstein (D-Mercer/Middlesex). “Contractors need to understand the severity of their actions; this is not simply the theft of wages, it is the theft of financial security, opportunities and health benefits. We must ensure employers cannot continue to commit this callous, selfish and criminal act without facing severe consequences.”

“Workers’ rights are vital to the quality of life for those in New Jersey’s workforce and for the families they support,” said Senator Lagana (D-Bergen/Passaic). “We should be rewarding businesses and contractors that do the right thing and must take action to prevent bad actors from operating in this state undeterred. Workers need strong protections from our laws to ensure they receive the fair compensation they deserve for their labor.”

• A-5840/S-4225 sponsored by Senator Greenstein and Senator Madden, the bill would make any client employer and any labor contractor providing workers to the client employer subject to joint and several liability and shared civil legal responsibility for violating any State employer tax laws.

• S-4226 sponsored by Senator Madden, the bill would permit the DOLWD to post the name of an individual who violates State wage, benefit, or tax law. It would only allow the DOLWD to do this after the Commissioner issues a final order, which occurs after a multi-step process in which the individual can appeal the decision. The bill would prohibit public entities from entering into contracts with any individual on the list.

• A-5843/S-4227 sponsored by Senator Lagana and Senator Greenstein, the bill would require employers to post labor law posters regarding worker “misclassification,” which refers to the practice of improperly classifying workers as independent contractors instead of employees.

• S-4228 sponsored by Senator Lagana and Senator Greenstein, the bill would permit the Division of Taxation within the Department of the Treasury to share certain data with the Department of Labor and Workforce Development for the purpose of assisting it in investigations pursuant to any state wage, benefit, and tax law.

• A-5838/S-4229 sponsored by Senator Madden, the bill would permit the Commissioner of the Department of Labor and Workforce Development to issue a stop-work order against any employer that violates any State wage, benefit or tax law.

• A-5839/S-4230 sponsored by Senator Madden, the bill would permit the Commissioner of Department of Labor and Workforce Development to issue penalties against employers that “misclassify” their employees. The Commissioner could issue two types of penalties: one that, when collected, the Department would apply towards its enforcement and administrative costs, and the other, which when collected, the Department or employer would provide to the misclassified worker. The bill includes the latter penalty to incentivize workers to report misclassification.

On Thursday, the Senate voted out three of the six bills of the legislative package with A-5840/S-4225 passing with a vote of 25-14, S-4226 with a vote of 34-4, and A-5838/S-4229 with a vote of 30-9.

Today the Senate voted the final three bills of the six-bill legislative package with A-5843/S-4227 passing with a vote of 37-3, S-4228 passing with a vote of 40-0, and A-5839/S-4230 with a vote of 32-8.

All six bills now head to the Governor.