Madden, Lagana, Greenstein Employee Misclassification Bills Advance

Trenton – A set of bills sponsored by Senator Fred Madden, Senator Joseph Lagana, and Senator Linda Greenstein, which addresses the misclassification of employees as independent contractors by employers, passed the Senate Budget and Appropriations Committee today.

“The tendency by unscrupulous contractors to cheat their workers out of hard-earned wages and benefits in order to undercut the competition and increase personal profits is abhorrent. This creates untold social and economic costs for our middle-class families,” said Senator Fred Madden (D-Camden/Gloucester). “This series of bills aims to address these illegal and unfair practices while strengthening the protection for our workers throughout the state.”

“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.”

“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.”

• S-4227 (Lagana/Greenstein): This 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 (Lagana/Madden): This 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.

• S-4230 (Madden): This 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.

The three bills are a part of a six-bill legislative package to address misclassification.

Bills S-4227 and S-4228 both passed the committee by a vote of 12-0 and S-4230 passed by a vote of 9-3.