Important information from your New Jersey State Director
The New Jersey Legislature has been keeping Governor Phil Murphy’s pen busy, as the governor signed into law 153 bills on January 21, 2020. Business owners should take note of two of these laws. One, former Senate Bill 1791, amends the New Jersey Wage Payment Law (WPL) to require employers to provide additional information on employees’ wage statements. The second is a sweeping package of legislation that is aimed at cracking down on worker misclassification by imposing additional penalties.
The WPL previously required employers to provide employees only with a statement of deductions. Beginning May 20, 2020, the revised law requires employers with 10 or more employees to include additional information on wage statements:
- Gross wages,
- Net wages,
- Rate of pay, and
- Number of hours works during the pay period (if relevant to the wage calculation).
Employers should also note that the WPL permits employers to provide wage statements electronically, unless an employee specifically requests a paper copy. Failure to provide the information could result in a penalty of $250 for the first violation and $500 for subsequent violations.
The Governor also signed several bills into law, effective immediately, aimed at cracking down on worker misclassification. These laws vest a lot of power in the Commissioner of Labor and Workforce Development (the Commissioner). Business owners in New Jersey should be concerned because the Commissioner has been aggressive in applying New Jersey’s ABC test for worker classification. On several occasions, the Commissioner’s determinations on the ABC test have been overturned by courts.
The following is a brief summary of the laws going into effect:
- AB 5839 allows the Commissioner to assess an “administrative misclassification penalty” up to $250 per misclassified employee for a first offense. The Commissioner may impose penalties up to $1000 per employee for subsequent offenses.
- AB 5838 gives the Commissioner the power to issue a stop-work order against any employer that is in violation of a wage, benefit, or tax law. The stop-work order requires the employer to cease operations at any site where a violation has occurred. The stop-work order remains in effect until the Commissioner releases the order or until the employer has paid any wages or penalty owed.
- AB 5840 imposes joint and several liability on client employers and labor contractors for any violation of state employer tax law (including worker misclassification).
- AB 5843 requires employer to conspicuously post a list of rights and responsibilities concerning worker classification.
- SB 4226 allows the Department of Labor and Workforce Development to publish on its website the name of any person found in violation of wage, benefit, or tax law.
- SB 4228 allows the New Jersey Department of Taxation to share information with the Department of Labor and Workforce Development.
Questions?
Employers concerned about independent contractor issues should download NFIB’s Guide to Independent Contractors. Employers with additional questions can also contact the NFIB Small Business Legal Center directly at 800-NFIB-NOW.
This alert is for informational purposes only and does not constitute legal advice.
