Senate Committee Approves Misclassification Bill to Codify Existing Regulations  

Trenton – A bill that would codify into law existing regulations that protect the rights of workers against misclassification so the regulations can’t be ignored or discarded by future administrations was amended and approved by a Senate committee today.

The bill, S-4204, sponsored by Senate President Steve Sweeney, was updated by the Senate Labor Committee to make it identical to the companion measure in the Assembly and to reflect the state labor regulations already in place as they’re interpreted and enforced by the Department of Labor and Workforce Development.

“This is a pro-worker bill that will simply codify into law existing regulations so that future administrations can’t disregard the protections already in place to protect workers against the loss of basic rights by being misclassified,” said Senator Sweeney (D-Gloucester/Salem/Cumberland). “We want to put into law the current regulations to ensure the ability to protect workers from being exploited through misclassification. The amendment will continue to ensure the ability of legitimate independent contractors to pursue their work at the same time it safeguards against misclassification.”

A misclassification is the improper designation of workers as “independent contractors” rather than “employees” in order to allow employers to evade basic workers’ rights.

The bill will maintain the current practice of using the “ABC” test to classify workers. The three-part test, adopted by the New Jersey Department of Labor & Workforce Development and affirmed by the New Jersey Supreme Court, is used to determine whether a worker should be classified as an employee or independent contractor. The amendment restores language in the “B” part of the test so that employees working outside the places of the employers’ business will continue to qualify as independent contractors.

Senator Sweeney noted that the legislation is not the same as the California law and that it won’t change the way freelance journalists are classified. Those who are classified as independent contractors can continue with that designation.

“Misclassification not only hurts workers, it hurts law-abiding businesses and the state,” said Senator Sweeney. “The businesses that don’t play by the rules aren’t paying into the unemployment fund or the disability fund, which raises costs for all other businesses. It shortchanges everyone else.”

The committee vote was 3 – 1.