NJBIA opposed a bill approved by the Senate Wednesday that could lead to overzealous enforcement against employers who use independent contractors.
The legislation enhances penalties for misclassification of employees under state laws that are often subject to different interpretations. It also allows for overbroad enforcement by the state labor commissioner with little oversight or control by the courts.
The bill, A-5890, passed in the Senate by a vote of 26-9 Wednesday and now goes to Gov. Phil Murphy. The Assembly had previously approved the bill by a vote of 48-22-2 on June 21.
“While there is the need for the state to enforce misclassification law against truly bad actors, we maintain great concern that the legal powers granted the state Department of Labor and Workforce Development are excessive and could have a chilling effect on those businesses who comply with the law,” said NJBIA Vice President of Government Affairs Ray Cantor.
“Under this bill, the state labor commissioner can file a civil suit for an alleged injured person, rather than the person filing his or her own private suit. The commissioner can enlist the use of private law firms to perform these suits, putting the lure of profits over policy.
“It also expands stop-work orders to apply to all of a business’ locations, even if the other locations were not involved in the allegation. This enhanced power can unfairly coerce innocent employers from exerting their rights because it will become too costly to challenge an allegation by the Department.”
Cantor also said the bill enhances New Jersey’s reputation as being unfriendly to business. To read his written testimony to the Senate Labor Committee earlier this month, click here.