In New Jersey, a common way in which employers deprive employees of the wages and benefits they are entitled to is through misclassification. Workers who check all the boxes to be an employee under the law but are categorized as independent contractors are deprived of myriad benefits. That can include pay, fringe benefits, overtime, workers’ compensation and more.
Fortunately for these employees, there are options available to hold their employer accountable. To make sure they get their employee-based pay and benefits, it is important to understand exactly what the law says and the compensation they can receive for the misclassification.
Employers are responsible for properly classifying workers
In New Jersey, the difference between an employee and an independent contractor is based on the “ABC test.” A worker will be an independent contractor if they are:
- Free from direction or control as they perform their work
- They work outside the normal course of business
- They are engaged in an independent trade, occupation, or business
Workers who do not fall into these categories will generally be an employee. With that, they should receive minimum wage protection, get overtime, receive workers’ compensation if they are injured, and have the right to unemployment benefits.
The employer is vulnerable to substantial financial penalties with the state. They will also be required to pay as much as 5% of the employee’s gross income from the previous year. The employee can receive whatever wages they were deprived of due to the misclassification, as well as benefits. That can include coverage for health care paid out of pocket, time off they did not receive, and as much as 200% of what they were not paid in damages.
Workers who are concerned about lodging a complaint against their employer are protected from retaliation. They cannot be terminated if they seek to receive back pay and benefits.
Misclassified workers should have options
Misclassification of workers continues to be a problem in New Jersey despite the state taking steps to put a stop to it. Many workers are unaware of the details of classification of employees and how they can be harmed financially and personally by it. When trying to recover pay and benefits, it is imperative to have assistance from the start.