An interesting case coming out of New Jersey…
We often blog about “misclassification” which is a laconic way of referring to the misclassification of employees as something other than employees, such as independent contractors. Home Depot is experiencing this right now as it responds to a group of cleaning workers who claimed Home Depot failed to pay them proper wages. Home Depot responded that it has not “employed” these workers and rejected any sort of employer-employee relationship between the Company and the workers.
In light of this current case, below is the current New Jersey test, adopted in a January 2015 case Hargrove v. Sleepy’s, LLC, No. A-70-12 (072742) (N.J. Jan. 14, 2015) to apply when determining an individual’s status for purposes of the New Jersey wage and hour law.
In Hargrove, the New Jersey Supreme Court concluded that the “ABC” test governs.
Under the ABC test, employers will now have the burden of showing that an individual providing services:
(A) Is free from the company’s control in performing the services
(B) Performs work outside the usual course of the company’s business or outside the company’s place of business and
(C) Is engaged in an independently established business.
The Court noted that “the failure to satisfy any one of the three criteria results in an ‘employment misclassification.’”
It will be interesting to see how the court applies the ABC test in the Home Depot case. Stay tuned…