New Jersey law requires employers to classify workers as employees for certain reasons:  tax withholdings, employee benefits, Workers’ Comp insurance, Unemployment Insurance Benefits, paid sick leave, temporary disability coverage, and Social Security Disability benefits.  Some employers, not wanting to pay into these programs, purposely play unlawful and dangerous games with their workers and the government.  They label workers as “independent contractors” when they are not, or they don’t label them at all, preferring to pay workers under the table, or paying them less than minimum wage.

If an employer misclassifies you or fails to put you on the books, then you will be paid incorrectly and/or missing proper pay and benefits — while paying more taxes than you should. Your employer may have done this intentionally and engaged in wage theft or made a mistake because what you do and how you do it may not fit neatly into one (1) category or another.  This is a good example of “ignorance of the law is no excuse.”

You’re an Employee but Misclassified as an Independent Contractor

If you perform a service and are paid for your work, you’re presumed to be an employee under several New Jersey laws, including those covering unemployment benefits and wages and hours. If your employer disagrees, it has the burden of refuting that by proving all of the following, commonly called the ABC Test:

• You have been and will be free from control or direction over the performance of your work by contract and the facts of your situation
• Your service is either outside the usual course of the business where you work, or it’s performed outside of all its places of business
• You’re customarily engaged in an independently established trade, occupation, profession, or business.

Contractor arrangements have become much more common as employers seek to cut labor costs and avoid workforce regulations and workers try to put together a string of jobs in what has come to be known as the “gig economy”.

If you are actually an employee but the employer made up that  you are an independent contractor, it doesn’t matter if they send you a 1099 for tax purposes at the beginning of the next tax year; it doesn’t matter if they get you to sign a form saying you are an independent contractor; what matters is what you actually do, not what they make up, label, and paper you as being.  Large employers in the U.S. have been hit with penalties and unpaid wages amounting to hundreds of millions of dollars.  They are wage thieves who couldn’t tolerate the government’s rules so they stole your status, your proper pay, your job benefits, and your government benefits.  When they are exposed, it costs them a lot of money, and it should.  They deserve to be punished for cheating you and others that way.  It is a dangerous game they play because it costs you your government benefits, which can be substantial in the case of physical injury on the job, unemployment benefits, disability benefits, and more.

When the government catches such scheming employers, it comes down hard on them, to make the point to them and others that this is not the right way to treat vulnerable employees, and to recoup all the unpaid monies that should have been paid into the various government benefits systems and need to be paid back retroactively.

If you have been misclassified, you have rights and remedies available to you, including substantial penalties due you from the misclassifying employer.  Employers also are on the hook for penalties if they retaliate against you for reporting them to the state authorities for misclassification.  New Jersey law specifically prohibits retaliation by the employer.

If you believe you’ve been misclassified as an independent contractor, contact us right away so we put you on the right path to wage equality and social justice

You’re an Hourly Employee but Misclassified as a Salaried/Exempt Employee

If an employer intentionally labels you an exempt employee, they probably want you to work longer hours without paying you overtime. Under the law, getting a salary, being labeled as an exempt employee, or having a particular job title doesn’t mean you shouldn’t be paid time-and-a-half if you work more than 40 hours a week.

Generally, bona fide executive, administrative, professional, and outside sales employees are exempt from overtime requirements in New Jersey. State law adopts federal regulations used for the Fair Labor Standards Act (FLSA), which spell out if one qualifies as an exempt employee in different jobs.

These requirements are very specific. You must earn at least $684 a week ($35,568 a year) to even be considered exempt from overtime. The FLSA tests are, broadly:

1. Executive

 

You mostly manage the business or one of its departments or subdivisions. You customarily and regularly direct two or more full-time employees or their equivalent. You can hire or fire employees, or your recommendations to do so are given weight. You can also be an executive if you own at least 20% of the organization and actively manage it.

 

2. Administrative

 

You primarily perform office or nonmanual work directly related to the management or general business operations of your employer or its customers. This includes having discretion and independent judgment concerning significant matters.

 

3. Professional

 

Your primary duty is work requires advanced knowledge that’s mostly intellectual. You exercise discretion and judgment requiring advanced knowledge in a field of science or learning typically learned in a lengthy course of specialized, academic instruction. Creative professionals may be exempt when their primary work requires invention, imagination, originality, or talent in a recognized artistic or creative endeavor field. Teachers in an educational organization whose primary duties are teaching, instructing, tutoring, or lecturing are exempt.

 

4. Outside Sales

 

You usually work away from your employer’s place of business, and your primary duty is selling and getting orders or contracts for products or services that customers buy.

 

5. Computer-Related Positions

You’re working as a computer systems analyst, programmer, software engineer, or you’re a similarly skilled worker in the computer field performing these kinds of responsibilities:

• Applying systems analysis techniques and procedures, including consulting with users, to decide software, hardware, or system functional specifications
• The development, design, analysis, documentation, testing, creation, or modification of computer programs or systems based on user input or system design specifications
• The documentation, design, creation, modification, or testing of computer programs
• A mix of these duties requiring the same skills

If you think your position is misclassified, call our office right away for help and advice.  You have the right to seek economic justice in the form of back pay for all of the work you did past 40 hours, at time-and-a-half, retroactive to two (2) years from the date of your complaint.

For violations of the NJ Wages and Hours Law, an employee may recover the full amounts due him or her together with such reasonable attorney’s fees and costs as may be allowed by the court. A civil suit seeks to recover for unpaid overtime wages due must be filed no later than 2 years after the unpaid compensation became due. Alternatively, an employee may file a wage and hour claim with the New Jersey Department of Labor and Workforce Development.

Has Your Employer Misclassified Your Job or your Payroll Status?

If you have questions concerning your employment or payroll status or believe you have grounds for a legal claim, contact Kingston Law Group through email (hisaacs@kingstonlawgroup.com) or call us at 609-683-7400.

We will schedule a near-term reduced fee initial consultation. We will listen to your facts, explain the law, and outline your best avenues to achieve social and economic justice. We can speak with you on the phone, through a Zoom call, or in person if you’re vaccinated against Covid-19. We accept credit card payments, and our appointments are from 9 a.m. to 5:30 p.m., Monday to Friday. We can schedule evening appointments during the workweek by special appointment only.

Contact us today. You’ll be glad you did.