New Jersey Governor Phil Murphy has signed an executive order to find a way to stop employers from mis-classifying workers in an effort to subvert the law and cut costs.
John Ballantyne is executive Secretary-Treasurer of the Northeast Regional Council of Carpenters. He says the misclassification of employees occurs when companies call their workers independent contractors.
“They do this to avoid paying taxes, insurance costs, and payroll deductions. It hurts workers. It hurts honest law-abiding businessmen that can no longer compete within our industry against such unscrupulous practices.”
New Jersey Labor Commissioner Robert Asaro-Angelo says misclassification adversely affects workers, taxpayers, and employers who play by the rules.
“Employers who misclassify workers don’t pay into unemployment or temporary disability insurance cheating their fellow New Jerseyans out of hundreds of millions of dollars in the state treasury. Misclassified employees also miss out on vital safety net programs such as family leave insurance, workers compensation, disability, and more.”
Governor Murphy says the task force will make recommendations on how to improve misclassification monitoring and enforcement.
“This is a question about enforcing what is already on the books and we’re coming out of a period that we’ve done a lousy job. It hasn’t been coordinated. Our backs have been turned on this illegal practice. And we’re saying today that those days are over.”
If companies circumvent labor law by classifying their workers as self-employed, Murphy says they’ll be brought into compliance or be put out of business.