New Jersey: State Grip Tightens on Employee Misclassification Violations


All Employers with NJ Employees


July 8, 2021


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On July 8, 2021, New Jersey enhanced employment protections through a series of new laws aimed to prosecute misclassification of employees as independent contractors.

  • A-5890/S3920 allows the labor commissioner to immediately seek a court injunction against alleged misclassification practices, rather than through traditional administrative law proceedings. It also allows the commissioner to issue stop-work orders across all worksites, not just where a violation occurred.
  • A-5891/S3921 creates the Office of Strategic Enforcement and Compliance within the Department of Labor and Workforce Development (DOLWD) to enforce state wage, benefit, and tax laws.
  • A-5892/S3922 expands insurance fraud under the New Jersey Insurance Fraud Prevention Act (NJIFPA) to include insurance premium evasion that occurs when misclassifying employees. Penalties are $5,000 for the first violation, $10,000 for the second violation, and $15,000 for each subsequent violation.

The newly designated powers of the commissioner allow for more swift and far-reaching prosecution of violators. Employers should take care with independent contractor designations to avoid potential work shutdowns and penalties.

Action Items

  1. Have independent contractor status reviewed by legal counsel.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

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