We have seen different States issuing more legislation in the recent years combating the misclassification of independent contractors, that should have been categorized as employees. If categorized correctly, these employees would have been contributing to social security and medicare at the Federal level, plus unemployment, family leave, etc. at the State level.
On July 9, 2021, Governor Murphy signed four additional laws into effect to build upon and expand these efforts: A5890, A5892, A5891, and A1171.
Based on the article from Reed Smith LLP, these bills are designed to:
- A5890 creates a mechanism for the state to combat worker misclassification through litigation for alleged violations of any wage, benefit, or tax law, and provides additional penalties for the enforcement of stop-work orders, including the ability to assess a civil penalty in an amount the commissioner deems appropriate, the requirement for employers to pay employees for the first ten days of the stop-work order, and the ability of the state to sue on behalf of the employees for non-payment of such wages.
- A5892 facilitates additional information exchange between state entities to identify misclassification, including the Department of Labor, the Bureau of Fraud Deterrence, and the Commissioner of Banking and Insurance.
- A5891 creates an Office of Strategic Enforcement, funded with one million dollars, to coordinate strategic enforcement of wage, benefit, and tax laws across state agencies.
- A1171 creates a public database of certified payroll information for all public works projects.
Link Reed Smith LLP full article – https://www.lexology.com/library/detail.aspx?g=83370cc2-0e7c-44b4-8e71-2bff7d435c4a
