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On behalf of our 20,000 members and their 1.2 million employees, I am writing to express our opposition to A-862 (substitute). While we share the belief that worker abuse should not be tolerated in any form and respect the intent of this legislation, we have the following concerns with the bill in its current form.

First, adding additional layers to New Jersey’s stringent existing statutory scheme could result in workplace mandates that are confusing and difficult to comply with, yet still do not solve the problem of worker exploitation. Several statutes currently exist which subject employers who commit wage violations to criminal penalties including disorderly person’s offenses. In the case of knowing misclassifications of construction workers, employers may even be charged with second degree crimes and face similar penalties as individuals convicted of manslaughter, kidnapping, and sexual assault. Violators in the construction industry may also face administrative fines, license revocations, stop-work orders, and disbarment from public work. Stop-work orders may likewise be imposed for businesses outside of the construction industry that do not adequately provide workers’ compensation, or provide false, incomplete or misleading information on their number of employees.

Second, since A-862 does not differentiate between knowing and negligent violations, it could result in unintentional behavior being treated in an overly punitive manner. For instance, employers often become confused as to what constitutes exempt versus non- exempt employee status for the purposes of paying overtime. Accurately making this determination has gotten more complicated because of a difficult economy where the tasks assigned to employees may vary from day-to-day.

Next, the bill provides for liquidated damages equal to 200 percent of the wages owed. Under the Federal Labor Standards Act (FLSA), however, employees can recover liquidated damages in an amount equal to their lost wages. NJBIA recommends mirroring the FLSA in terms of providing liquidated damages under A-862.

NJBIA also has concerns with broadening the definition of retaliation under the wage and hour law to include any adverse action against an employee within 90 days of the employee making a complaint about wages not being paid.

Lastly, we have concerns with the provision that extends joint liability to client employers and would require them to share civil legal responsibility for any violations of the provisions of state wage and hour laws or violations of the provisions of section 10 of P.L.1999, c.90 (C.2C:40A-2) regarding compliance with state wage, benefit and tax laws, including provisions regarding retaliatory adverse actions against employees for exercising their rights under any of those laws. Client employers include any business entity that obtains workers, from a contractor or subcontractor, who perform labor or services within its usual course of business.

For these reasons, we respectfully ask that you vote “NO” on A-862.

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