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The NJBIA Employment and Labor Law Policy Committee recently held a virtual meeting to discuss some of the latest workforce issues, such as employee misclassification and vaccine mandates in the private sector.  

The meeting featured Joe Petrecca, Assistant Commissioner of the New Jersey Department of Labor and Workforce Development, Mindy Gensler, Legal Liaison for the Department of Labor and John Sarno, President of the Employers Association of New Jersey.    

Gov. Phil Murphy recently signed into law multiple bills intended to address the issue of employee misclassification. Petrecca and Gensler discussed some of the changes in policy and enforcement surrounding employee misclassification as a result of these new laws.  

A new Office of Strategic Enforcement and Compliance will be created under the Department of Labor to oversee and coordinate the enforcement of state wage, benefit and tax laws throughout the Department.  

According to Petrecca, the new office will engage in education and outreach, and work with key players in industries where non-compliance is high. Additionally, New Jersey, along with 28 other states, will continue to use all three prongs of the “ABC test” to determine worker classification.   

Several provisions within the recently signed laws increase punitive measures which can be taken by the state Department of Labor with respect to employee misclassification. Stopwork orders have  expanded past the construction industry to include all sites of any business found in violation, and employees will receive 10 days of pay during stop work orders.  

Additionally, NJDOL can assess penalties of 5% gross earnings of misclassified employees for 12 months. Upon notice, NJDOL may post the names of employers found in violation of state wage, benefit or tax laws to its website, and these employers will be barred from contracting with public entities.  

According to Gensler, these measures are intended to encourage compliance and level the playing field for employers by preventing an unfair competitive advantage, rather than obstruct business operations.  

Amidst the recent surge in COVID-19 cases as employees return to work on-site, there has been a drive to increase vaccination rates. Gov. Murphy recently mandated vaccinations for employees working in healthcare and certain high-risk settings. Vaccinations for now mandated for all federal employees.  

While governments and larger companies have been implementing vaccination requirements as a condition of employment, smaller and mid-size companies are fearful of frivolous litigation if they put in place a mandate for their employees. Sarno discussed this issue, and the potential legal repercussions businesses may face in implementing vaccine requirements.  

Sarno referred to a memorandum released by the U.S. Department of Justice which states vaccine requirements do not violate federal laws, such as OSHA, ADA or Title 7 if there are reasonable accommodations for those who cannot be vaccinated for medical or religious reasons. Additionally, political objections to vaccination do not constitute whistleblowing under the Conscientious Employee Protection Act.  

Some examples of accommodations employers can provide include allowing employees who refuse vaccination to work offsite or mandating weekly or biweekly testing. Employers may also put employees on unpaid leave or terminate those who refuse vaccination, however, employees who are terminated may be able to sue as the vaccines have been approved for emergency use but have not yet received full FDA approval.  

The Pfizer vaccine is expected to be fully authorized by the U.S. Food and Drug Administration this September, and once approved, employees’ ability to sue will be diminished.