The State of New Jersey (and many other states) has started to tighten up laws regarding independent contractor status. One troubling component (to management-side practitioners and employers alike) of this New Jersey initiative is to compel employers to post a notice that explains elements of independent contractor law and, essentially, invites workers to file suits and complaints alleging that they are not independent contractors.

The poster explains that it is a violation of the law for an employer to misclassify its workers. It also explains the A-B-C test, the tri-partite standards in New Jersey, the very difficult tests to meet, for someone to be deemed an independent contractor. These standards are that: a) the individual has been and will continue to be free from control or direction over the performance of work performed, both under contract of service and in fact; b) the work is either outside the usual course of the business for which such service is performed, or the work is performed outside of all the places of business of the enterprise for which such service is performed; and, c) the individual is customarily engaged in an independently established trade, occupation, profession or business.

These standards are hard to meet, especially the third prong, the independent business prong. The putative employer must show that the alleged independent contractor derives roughly one-third of his income from sources other than the putative employer. The person must also evidence some of the traditional indicia of an independent business entity, such as maintaining an office, paying their own insurances (e.g. workers compensation) and perhaps having employees of its own.

There is more. The poster must also enumerate the various benefits and protections that the State wage, benefit (e.g. paid sick leave, paid Family Leave) and tax laws provide to statutory employees. There must also be a delineation of the remedies that misclassified workers may be allowed to recover under State law. Last, but by no means least, the poster must give the contact information for how an allegedly aggrieved worker may file a complaint with the NJDOL. The poster must also notify that there can be no retaliation against a worker who files a complaint with his employer or the NJDOL

The Takeaway

The trend in New Jersey and elsewhere is to make it all but impossible for an entity to engage people or other entities as independent contractors. This is especially true if you seek to engage a single individual in this capacity. The required poster slants any relationship between an employer and anyone else or ay company as one of “employment.” This is particularly troubling given the undisputed reality that many entities, especially single individuals, want to be independent contractors.

Why not just give a list of plaintiff side lawyers as well…