New Jersey’s task force on independent contractor misclassification has issued its report and outlined steps the state and its Department of Labor plan to take to combat the problem.
The task force was formed in May 2018 in order to provide advice and recommendations on strategies to combat misclassification, including examining and evaluating existing enforcement by executive departments and agencies. It was charged with developing best practices to increase coordination of information and efficient enforcement, developing recommendations to foster compliance with the law, and reviewing existing law and applicable procedures related to misclassification.
The task force developed the following recommendations:
Targeted education and public outreach. Create a hotline, webpage and email address to report misclassification; require employers to post notices alerting workers to the issue; raise public awareness through press strategy.
Strengthening state contracting. Require entities that contract with the state or receive state funding to confirm that they are aware of the legal standard for proper classification of workers based on the ABC test, with potential loss of funding or contract termination if misclassification is found.
Interagency coordinated enforcement. Conduct on-the-ground investigations and joint enforcement sweeps with multiple agencies, working together to elicit facts and obtain information using each agency’s jurisdictional knowledge and expertise.
Data sharing. Share information between agencies subject to any applicable confidentiality requirements.
Cooperation with neighboring states. Work with neighboring states to share information to assist in investigations.
Cross-training. Provide cross-training for field investigators from various state and local agencies.
Criminal referrals. Refer cases to the Office of the Attorney General for criminal prosecutions as appropriate.
Utilize workers’ compensation laws. Use existing workers’ compensation laws to bolster misclassification enforcement.
Use DOL’s power to revoke and suspend licenses. The commissioner should use his power to revoke or suspend licenses to deter employees from not complying with labor laws.
Advocate for legislation. The task force and DOL will support legislation that:
- Requires public posting of notices regarding misclassification;
- Gives DOL the ability to issue stop-work orders;
- Grants DOL the same access to tax information as other cabinet agencies;
- Imposes liability on employers who rely on companies that misclassify in their supply chain, in subcontracts, or other contracts where a joint employment relationship is established;
- Imposes liability on business owners and successor entities that misclassify;
- Requires companies found to misclassify to fund the investigatory costs and any attorney’s fees incurred; and,
- Increases fines and penalties.