New Jersey residents who work in what is known as the “gig” economy can breathe a little easier today. On July 8, 2021, Governor Murphy signed new laws addressing the misclassification of New Jersey workers that will provide additional benefits for workers when they go into effect. Misclassification is the practice of illegally and improperly classifying employees as independent contractors when they are actually employees. This practice deprives workers of the right to minimum wage and overtime, employee compensation, unemployment, earned sick leave, family leave, temporary disability and other benefits.
One might ask, “How does wrongly classifying workers affect you as an employee in New Jersey?” If your employer describes you as a self-employed contractor rather than an employee, you are missing out on the benefits above. Employers do this to save taxes and benefits, but it has a negative impact on workers in a number of ways. Employers could pay someone “under the table” and not report their income. Or employers could designate an individual as an independent contractor and issue them a W-9 for tax purposes with no tax deduction or benefit. Employers do not provide employee compensation benefits to independent contractors. While these new laws do not specifically address workers ‘compensation benefits, they make it easier for more workers to access all benefits, including workers’ compensation.
“Misrating workers as independent contractors just to avoid paying the insurance premiums harms hard-working people who deserve the same benefits and protection as other employees in the company,” said Assemblywoman Shavonda Sumter, sponsor of one of the new laws .
Even if your employer fails to comply with this new law and mistakenly designates you as an independent contractor, New Jersey workers’ compensation laws may require your employer to provide employee replacement benefits if you are injured while on the job. This also applies if your employer has misclassified your job, as long as you can prove that you are actually an employee. While true independent contractors in New Jersey are not eligible for workers ‘compensation, many so-called independent contractors in New Jersey are actually workers under the Workers’ Compensation Act. If your employer controls most of your day-to-day work by telling you where to work and what to do during the work day, you may be entitled to workers’ compensation if you injure yourself on the job.
Governor Murphy said he signed these laws because “these employers do so for one simple reason: to save themselves a few dollars by leaving their employees out of their fair wages and benefits.” While New Jersey State has a legitimate interest in ensuring that the state does not miss any tax revenue paid on workers’ wages, these new laws also provide workers with the added protection of easier access to many benefits, including employee compensation benefits if they injure themselves at work.
Comments are closed.