There must be something in the air! I have just posted the other day about a New Jersey initiative to expand the reach of independent contractor misclassification to the trucking industry and now the Third Circuit has certified a question to the New Jersey Supreme Court on this very issue. The Circuit has asked the Court to determine whether delivery drivers are employees or independent contractors. This outcome an (and will) affect thousands of workers and will mean possible State revenues of millions of dollars. The case is entitled Hargrove et al. v. Sleepy’s LLC.
The question has tremendous significance because there is no definitive, i.e. Supreme Court designated standard for defining an “independent contractor” in this context. The Third Circuit has recognized this, stating “we believe that this case raises an important issue of New Jersey law that is both determinative and novel.” If the delivery drivers were deemed employees, the employer would be obligated to pay payroll taxes, unemployment insurance contributions, workers’ compensation contributions and so on and so on. In other words, this could/would be a windfall for State coffers.
The plaintiffs argued that the “hybrid test” enunciated in the state case entitled Pukowsky v. Caruso was the correct test, not one that just centered on an ostensible absence of control. The hybrid test focuses on the economic dependence of the putative employee upon the employer. The employer defended by asserting that even under this standard, the wage-hour claims were meritless as both standards were focused on whether the individual was in their own business, whether he bore so-called “entrepreneurial risk.”
I must say this is odd given the passage of a piece of legislation by the Assembly that focused on alleged misuse of “independent contractors” in the trucking industry. It’s clearly a hot button issue here in the Garden State. In a State where the definition of “employee” has been (arguably) consistently expanded, under the whistleblower law, for example, a legitimate employer concern is the further expansion of the term into an arena, i.e. drivers, where economic realities mandate a more pragmatic, business-like approach to the entire issue of who is and who is not an “independent contractor.”