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New Jersey: New Employer Rules and Penalties for Employee Misclassification

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New Jersey recently enacted several new laws to combat misclassification of independent contractors. Key points are summarized below.

  • JAN 20, 2020 | A5838 allows the Labor Commissioner to issue a stop-work order to any business in violation of wage, benefit, or tax laws. Following seven days’ advance notice, affected worksites will be required to close until the Commissioner releases them. Violation of the order can result in an additional $5,000 penalty per day.
  • JAN 20, 2020 | A5839 increases penalties for misclassification of employees as independent contractors. Now, the Labor Commissioner can assess up to $250 per misclassified employee as an “administrative misclassification penalty” for first time violations, and up to $1,000 per employee for subsequent violations, in addition to other statutory penalties. Employers may also have to pay a fine of up to 5 percent of the worker’s gross earnings over the most recent 12 months to benefit misclassified workers, which could either be held in trust by the Commissioner or paid directly to the worker.

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Nevada: Extensive Legislative Updates

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The Nevada Legislature enacted a number of laws in 2019.  Below is a summary of legislative updates that impact employers.

AB 181 | Sick Day Notice.  Effective May 15, 2019, employers cannot require employees to be physically present at work in order to provide notification of an injury or illness requiring sick leave usage.  However, employers can continue to require employees to notify the employer when they are sick and cannot come to work.

AB 192 | Removal of Decriminalized Offenses.  Effective July 1, 2019, any person convicted of a decriminalized offense may request to have records of the offense sealed so they do not appear on background checks.

AB 226 | Microchip Implantation.  Effective October 1, 2019, employers or any other entity or individual cannot require a person to have a microchip implant or other permanent identification marker as a condition of employment.

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New York, NY: Human Rights Law Expanded Again

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October 13, 2019

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The New York City Council expanded their existing harassment legislation, once again. This latest revision will ensure that freelancers and independent contractors are protected by the New York City Human Rights Law. The previous law applied to employers that employed four or more employees and allowed them to file complaints with the New York City Commission on Human Rights when they faced harassment or discrimination based on race, religion, gender, or another protected class. The amendment expands this coverage to businesses that employ or engage at least four employees or independent contractors, combined.

Action Items

  1. Have harassment policies updated.
  2. Have managers trained on the new requirements.
  3. 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.

© 2019 ManagEase

September Updates

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This Short List addresses the following topics:
  1. REMINDER! EEO-1 Component 2 Reporting is Due September 30th
  2. DOL Says DOT Drivers Sleeping in Berths While Off-Duty is Unpaid Time
  3. 2nd Circuit: Collectively Bargained Arbitration is Governed by the Scope of the Agreement
  4. 9th Circuit: The Dynamex Independent Contractor Test Does Not Apply Retroactively – For Now
  5. New Noncompete Restrictions in Maine, New Hampshire, and Rhode Island
  6. Arizona: Mini-COBRA and Bona Fide Associations Updates
  7. California: Hairstyles Soon to Be Protected From Discrimination
  8. Emeryville, CA: Small Independent Restaurant Minimum Wage Hold Repealed
  9. Florida: Unemployment Compensation Protections for Domestic Violence Victims
  10. Indiana: Direct Sellers are Exempt from Minimum Wage Rules
  11. Iowa: Enacts Negligent Hiring Protections for Employers
  12. Louisiana: Electronic Notice to Employees Permitted for Group Health Insurance Plans
  13. Kansas City, MO: Enacts Salary History Inquiry Ban
  14. New Hampshire: Child Labor Hours Restricted
  15. New York: Paid Family Leave Benefit Schedule Update
  16. New York: Whistleblower’s Immigration Status is Protected
  17. Ohio: Motor Carrier Drivers Excluded from Definition of “Employee”
  18. Pittsburgh, PA: Paid Sick Leave is Revived by State Supreme Court
  19. Vermont: Expunged Records Make Criminal Convictions Vanish
  20. Virginia: Updates to Minimum Wage Exemptions and Nondisclosure Agreements
  21. West Virginia: Effect of Expunged Criminal Convictions

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Tennessee: Chooses the Former IRS 20-Factor Test to Determine Independent Contractor Status

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January 1, 2020

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HB 539 rejected the state appeals court adoption of the “ABC” test, and implemented the historical IRS 20-factor test to determine independent contractor status. The bill defines employment status where “the individual performs services for an employer for wages and the services performed by the individual qualify as an employer-employee relationship” based on the 20-factor test. Although the 20-factor test is no longer the official IRS test, several states still look to the standard when determining what employment status applies.

Generally, the 20-factor test looks at the behavioral control, financial control, and the type of relationship of the parties. None of the factors are determinative of an employment relationship and there is no presumption of employee status. Although the “ABC” test is largely more restrictive than the 20-factor test, employers should still review independent contractor relationships with legal counsel before the law goes into effect.

Action Items

  1. Have independent contractor status reviewed with legal counsel for compliance.
  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.

© 2019 ManagEase

Ninth Circuit: The Dynamex Independent Contractor Test Applies Retroactively

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May 2, 2019

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In Vazquez v. Jan-Pro Franchising, Inc., the Ninth Circuit stated that the California Supreme Court Dynamex decision applies retroactively. Specifically, Dynamex created the ABC test for determining whether an individual is an independent contractor for purposes of state wage and hour laws. Unfortunately, at the time, the California Supreme Court did not indicate whether or not Dynamex was to apply retroactively. Now, the Ninth Circuit has officially answered that question.

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April Updates

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This Short List addresses the following topics:
  1. OFCCP: Corporate Scheduling Announcement List Published for Federal Contractors
  2. VEVRAA Hiring Benchmark Lowered for Affirmative Action Plans
  3. Fifth Circuit: Independent Contractor Classification in Oilfield Industry Re-visited
  4. California: NEW Posting Requirement as of April 1, 2019
  5. California: Required Employee Pamphlets Updated
  6. California: Employers Are Liable for Wage and Hour Claims Without Accurate Time Records
  7. Reminder: San Francisco 2018 Employer Reporting Deadline is April 30, 2019
  8. San Francisco, CA: Minimum Wage to Increase July 1, 2019
  9. Massachusetts: State and Federal Overtime Exemptions are Not Identical
  10. Michigan: Paid Sick Leave FAQ’s and Poster Released
  11. New York: 24-Hour Home Care Pay Decided by Court of Appeal
  12. Oklahoma: Medical Marijuana Accommodations Clarified
  13. South Carolina: Labs Liable to Workers for False Positive Drug Tests

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Third Circuit: FAAAA Does Not Preempt State Independent Contractor Laws

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January 29, 2019

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In Bedoya v. American Eagle Express Inc., the Third Circuit Court of Appeal stated that the Federal Aviation Authorization Administration Act of 1994 (FAAAA) does not preempt New Jersey’s wage and hour laws, permitting delivery drivers to continue with a suit under state wage and hour laws for improper classification as independent contractors.

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Sixth Circuit: Off-Duty Law Enforcement Misclassified as Independent Contractors

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February 12, 2019

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In Acosta v. Off Duty Policy Services, Inc., the Sixth Circuit applied the six-factor “economic reality” test to determine whether off-duty officers were misclassified as independent contractors for purposes of the Fair Labor Standards Act (FLSA). There, the employer provided private security services using off-duty, sworn police officers, as well as nonsworn workers. The workers were allowed to accept or reject work assignments, were provided basic equipment, but had to supply their own vehicles and uniforms. The sworn officers typically wore their officer uniforms and used their patrol vehicles, while the nonsworn workers had to use their own police-style vehicle.

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California: New Independent Contractor Test for Domestic Caregivers

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January 11, 2019

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In Duffey v. Tender Heart Home Care Agency, LLC, the California Court of Appeal recently applied yet another independent contractor test to domestic caregivers who are subject to the Domestic Worker Bill of Rights (DWBR). Specifically, the DWBR states that an employment relationship exists under two possible scenarios. First, employment occurs “when the hiring entity exercises control over the wages, hours, or working conditions of a domestic worker.” The court noted that an employer need only have control over one of these characteristics, not all three. Second, employment is also defined “when a common law employment relationship has been formed.” This is analyzed using the Borello test.

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