New Jersey Gov. Phil Murphy last week signed a four-bill legislative package aimed at stopping the practice of misclassifying employees as independent contractors.

The legislation creates a new Office of Strategic Enforcement and Compliance within the Department of Labor and Workforce Development, and DOL will create a database to track payroll projects, which the governor’s office says are critical steps to tracking and eliminating misclassification.

“Creating a centralized office for the coordination of workforce and labor-related efforts will help ensure greater enforcement and compliance with New Jersey wage, benefit and tax laws,” Assembly Members Joseph Egan and Robert Karabinchak, sponsors of the bill that creates the new office, said in a joint statement. “This office will oversee the preliminary review of any business seeking state assistance to make sure they are complying with necessary regulations regarding employee compensation and contributions to unemployment and disability benefits funds. Ultimately, the coordination of these efforts will prove beneficial to our state, to employees, and to law-abiding businesses that deserve our assistance.”

The others bills in the package will simplify the process for identifying misclassified workers and implement stop-work orders at worksites where misclassification is identified, according to the governor’s office. They also make misclassifications to avoid insurance premium payments a violation of the Insurance Fraud Prevention Act.

The bills are:

  • A-5890/S-3920, which concerns enforcement of employee misclassification and stop-work order laws, effective immediately.
  • A-5891/S-3921, which creates the “Office of Strategic Enforcement and Compliance” in the Department of Labor and Workforce Development and appropriates $1 million from the General Fund for enforcement, effective immediately.
  • A-5892/S-3922, which streamlines identification of employee misclassification, effective Jan. 1, 2022.
  • A-1171/S-1260, which requires the Commissioner of Labor and Workforce Development to create statewide database of certified payroll information for public works projects, effective Jan. 1, 2022.

“Workers who are misclassified as independent contractors miss out on fair wages and benefits,” said Gov. Murphy. “These business practices are unfair, abusive, and illegal and they cannot be tolerated. Today’s action will give the state more tools to root-out and prevent misclassification. I am honored to sign these bills today on behalf of New Jersey’s workers.”