Legislative Advisory: Today at the State House

Package of Legislation Seeking to Address the Misclassification of Independent Contractors Clears the Assembly Labor Committee

The Assembly Labor Committee released seven bills today seeking to reform the broken system by which certain employers intentionally misclassify their employees as independent contractors. Certain employers do this in order to reduce their payroll costs and avoid a host of pro-labor laws that do not apply to independent contractors.

We are thankful to Chairman Joe Egan (D-17) for posting the bills for consideration and to the sponsors for their leadership. All bills were released unanimously with Assembly Members Houghtaling (D-11), Moriarty (D-4), Verrelli (D-15), Vainieri Huttle (D-37), Egan (D-17) and Sumter (D-35) voting “yes.” The three Republican members of the committee did not show up for the hearing.

A-5936 (Egan): Similar to recently enacted AB-5 in California, the bill seeks to apply the “ABC test” to almost all industries in the state to determine if workers are employees or independent contractors. New Jersey loses millions of dollars every year in state income tax, unemployment insurance contributions and other revenues due to the “misclassification” of workers. The New Jersey State AFL-CIO strongly supports the bill which is a “win-win” for workers and the state.

A-5838 (DeAngelo / Danielson): This bill permits the Commissioner of Labor to issue a stop-work order against any employer who is in violation of any State wage, benefit and tax laws, including the misclassification of workers.

A-5842 (Chiaravalloti / Moriarty): This bill permits the Division of Taxation to share with the Department of Labor information such as tax statements, reports, audit files, returns, or reports of any investigation so they can better coordinate enforcement of misclassification and other laws.

A-5839 (Moriarty / Verrelli / DeAngelo): The bill would establish monetary penalties for the misclassification of employees.

A-5840 (Carter / Verrelli): This bill establishes joint liability by making 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 any violations of the provisions of State employer tax laws, including provisions concerning the misclassification of workers.

A-5841 (Calabrese / Verrelli): Permits the public posting or listing of persons that violate wage, benefit and tax laws.

A-5843 (Speight / Verrelli / Moriarty): Requires employers to post notice to employees regarding the misclassification of workers.

The New Jersey State AFL-CIO thanks all affiliates that worked for the passage of these bills out of committee today.