New Jersey cracks down on employers that misclassify employees — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

New Jersey cracks down on employers that misclassify employees

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in Compensation and Benefits,Human Resources

by Patrick W. McGovern, Esq., Genova, Burns & Vernoia

Warning! Employers that intentionally misclassify employees as independent contractors face new penalties in New Jersey. Employers that intentionally misclassify workers unfairly stifle business competition because the practice lets them reduce labor costs between 15% and 20%, according to some estimates. That leaves employers that don’t cheat at a competitive disadvantage. Plus, employee misclassification strips workers of benefits and disability protection, and cheats the average taxpayer out of revenue.

But the New Jersey Legislature and the New Jersey Supreme Court have stepped in to penalize employers that misclassify employees as independent contractors.    

Misclassification is a crime

The Construction Industry Independent Contractor Act (CIICA), which went into effect on July 13, establishes criminal penalties for improper employee classification. It applies ...(register to read more)

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