For Immediate Release: February 10, 2022
Office of The Attorney General
– Andrew J. Bruck, Acting Attorney General
TRENTON – Acting Attorney General Andrew J. Bruck announced today that New Jersey is co-leading a multistate effort to support the adoption by the National Labor Relations Board (NLRB) of stronger protections for workers whose employers would misclassify them as independent contractors — a designation that can deprive workers of wages earned, core workplace benefits and the ability to organize.
In an amicus brief filed with the NLRB today, New Jersey urges the Board to adopt a more worker-protective standard for determining whether a worker is an employee protected by federal labor laws safeguarding the right to organize and collectively bargain, or, in the alternative, an independent contractor not covered by such legal protections.
Acting Attorney General Bruck is co-leading today’s multi-state amicus brief to the NLRB along with Pennsylvania Attorney General Josh Shapiro. A total of 14 other Attorneys General have signed onto the brief, which describes misclassification as a burgeoning problem that harms both workers and states, and asserts that “this is not the time to weaken protections” against the employer tactic.
“Here in New Jersey, we care about workers’ rights,” said Acting Attorney General Bruck. “Workers who are misclassified as independent contractors end up suffering a whole host of disadvantages – including substandard wages, denial of workplace safety protections, denial of employment benefits they rightfully deserve and, crucially, the right to fight for improved working conditions by organizing and collectively bargaining.”
“New Jersey is fully supportive of all actions that strengthen worker protections. Misclassification of workers as independent contractors rather than employees robs them of benefits such as minimum wage, earned sick leave, overtime pay, unemployment and temporary disability benefits, and the guarantee of minimum safety and health standards. It also strips them of the right to organize a union and collectively bargain with their employer, a right we view as fundamental. Therefore, we fully support replacing the current standard for determining worker classification under the National Labor Relations Act, and look forward to collaborating with federal and state agencies to protect workers,” said New Jersey Labor Commissioner Robert Asaro-Angelo.
Late in 2021, the NLRB issued a public notice inviting the submission of briefs on the question of whether the Board should reconsider its current standard for determining the independent contractor status of workers.
The current standard, adopted by the Board in 2019, allowed employers to classify workers as independent contractors if they can demonstrate, on balance, that the workers appear to have access to “entrepreneurial opportunity” similar to that of running an independent business.
The NLRB’s 2019 decision set aside a prior, more stringent test for classifying workers as independent contractors. That prior standard held that while multiple factors must be considered, a significant factor in any worker classification analysis was the extent to which an employer controls an individual’s work.
Today’s amicus brief argues for a return to the previous standard– or even stronger safeguards – rather than focusing on entrepreneurial opportunity.
Protecting workers by addressing misclassification of employees as independent contractors has been a priority for the Murphy Administration. In 2019, the Report of Governor Murphy’s Task Force on Employee Misclassification found that misclassification of employees in New Jersey had increased by more than 40 percent in the past 10 years, while some states have reported even higher increases. Since then, the Legislature has passed and Governor Murphy has signed two packages of legislation addressing the issue. Meanwhile, the Department of Law and Public Safety has been increasing the civil and criminal resources dedicated to worker protection and labor enforcement.
Misclassification of workers is taking place at “disproportionately high” rates in such rapidly growing industries as the app-based economy, as well as in industries with large numbers of low-wage and vulnerable workers such as janitorial services, trucking and transportation, retail, hospitality, home care and construction, today’s brief notes.
In addition, “billions” of dollars in state revenues are lost to misclassification, the brief contends, leaving states to divert already limited resources and cut spending in other important areas.
“When employers misclassify workers, they shirk their responsibilities to fund vital social insurance programs administered by state and local governments,” the brief notes, “and the public pays the price.”
Assistant Attorney General Mayur Saxena, Deputy Attorney General Chandini Jha, and Deputy Attorney General John-Paul Proctor of the Division of Law’s Affirmative Civil Enforcement Practice Group handled this amicus brief filing on behalf of the State.