New Jersey Passes Laws on Sick Leave and Pay Equity; Will Tackle Worker Misclassification (NJ)

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The National Law Review
Wednesday, May 9, 2018

A little more than 100 days into his tenure, New Jersey Governor Phil Murphy has made it clear that employment is one of his top priorities. In the past two weeks, Gov. Murphy has signed a Paid Sick Leave and an Equal Pay bill into law and established a Task Force on Employee Misclassification.

Paid Sick Leave

The New Jersey Paid Sick Leave Act was signed into law on May 2, 2018, and takes effect on October 29, 2018. It will require New Jersey employers of all sizes to offer their employees one hour of sick leave for every 30 hours worked. Covered employees will be eligible for paid sick leave after 120 days of employment and are then permitted to use up to 40 hours of sick leave per benefit year. Employers may set the benefit year. The benefit year does not need to be a calendar year but once set, it cannot be changed without prior notification to the New Jersey Department of Labor and Workforce Development. In lieu of tracking each hour worked and earned, employers may offer 40 hours of paid sick time at the beginning of each benefit year or utilize an existing paid-time-off policy so long as it confers equal or richer paid leave benefits than those provided for in the Act.

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The Equal Pay Act

The Diane B. Allen Equal Pay Act (NJEPA), signed into law by the Gov. Murphy last month, will take effect in less than four weeks – on July 1, 2018. New Jersey employers across industries should pay close attention to this effective date because the law places onerous requirements on them. The NJEPA contains extensive amendments to the New Jersey Law Against Discrimination (NJLAD) through its:

  • Prohibition of compensation discrimination on the basis of any protected class for “substantially similar work when viewed as a composite of skill, effort, and responsibilities”
  • Increased statute of limitations period from two to six years for claims alleging pay inequity or discrimination
  • Mandatory treble damages for successful plaintiffs

Task Force on Employee Misclassification

On May 3, 2018, Gov. Murphy signed an executive order establishing a Task Force on Employee Misclassification. Misclassification is when workers are incorrectly labeled as independent contractors rather than employees. Workers who are incorrectly classified frequently are not provided benefits and other protections available to employees, such as minimum wage, overtime compensation, family and medical leave, unemployment insurance, and workers’ compensation.

The New Jersey Task Force will be charged with a number of responsibilities to combat employee misclassification, including:

  • Examining and evaluating existing misclassification enforcement by executive departments and agencies
  • Developing best practices by departments and agencies to increase coordination of information and efficient enforcement
  • Developing recommendations to foster compliance with the law, including by educating employers, workers, and the public about misclassification
  • Conducting a review of existing law and applicable procedures related to misclassification

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Governor Murphy Signs Executive Order Establishing Task Force on Employee Misclassification (NJ)

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May 3, 2018

Trenton – Governor Phil Murphy today signed an executive order establishing the Task Force on Employee Misclassification. Employee misclassification can allow employers to escape their legal responsibilities to their workers, such as ensuring adequate workplace protections and providing employment-related benefits like unemployment insurance and workers’ compensation. Employers often misclassify their employees intentionally in order to reduce labor costs and avoid paying state and federal taxes.

“The exploitation of workers is not only unethical – it is illegal,” said Governor Phil Murphy. “In New Jersey, we promote fairness, fight against discrimination, and work to end unfair labor practices. I am proud to take this step forward to end a practice that creates an unfair advantage over companies that play by the rules and hurts our working families.”

“We must crack down on wage theft,” said Attorney General Gurbir Grewal. “More and more employers are misclassifying their workers as ‘independent contractors’ because they think it’s cheaper than doing things the right way. But this practice isn’t just illegal. It actually makes New Jersey’s communities poorer in the long run by denying workers the wages and benefits to which they are legally entitled, and that are essential to building a fair and prosperous economy. We are proud to join with other states in fighting this growing problem.”

“Protecting workers’ rights is an important function of government and that role cannot just be limited to private businesses, but to the State and who it hires,” said Senate President Steve Sweeney. “When someone is in effect working as employee, but deliberately misclassified as an independent contractor, that worker is losing benefits, wages and other compensation. That just isn’t acceptable. This Task Force should ensure that the State is compliant with best practices. I look forward to working with them on this important issue. Anyone working for the State of New Jersey should know that their job, compensation and responsibilities match their job classification. This is about fairness.”

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New Jersey bill seeks P3 expansion

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By Andrew Coen
Published April 13 2018, 11:08am EDT

New Jersey lawmakers are pushing again for an increase in the use of public-private partnerships to jump-start infrastructure improvements in the cash-strapped state.

Two and a half years after former Gov. Chris Christie conditionally vetoed an expansion of New Jersey’s P3 program, a state senate committee advanced legislation on April 5 that if enacted would permit localities to enter into P3 agreements for building and highway infrastructure projects. The measure would make local governments, school districts, public authorities and state colleges eligible to enter into P3s where the private entity would assume full or partial financial and administrative responsibility for capital projects.

“The whole purpose is to provide another tool for flexibility in financing,” said State Sen. Steven Oroho, R-Franklin., who co-sponsored the bipartisan bill with Senate President Steve Sweeney, D-Gloucester. “Any capital asset that has a revenue stream associated with it could benefit.”

Michael Likosky, who heads the infrastructure practice at 32 Advisors, said incorporating more P3s in New Jersey would help the state realize savings from competitive bidding and incorporate better technologies with expertise of the private sector. He said this strategy has had success in neighboring Pennsylvania with bridge projects and provides potential to rethink financing strategies at New Jersey’s public universities, highways and New Jersey Transit.

“New Jersey has to focus again on economic development and growth, which has gone through a hiatus,” said Likosky, who has more nearly two decades of experience providing advice on P3s and infrastructure investment. “New Jersey has difficult choices to make if it wants to grow its infrastructure and economy.”

Likosky said since the bill includes a provision allowing availability payments for financing, there is a wide array of capital projects that could benefit from P3s, even if they don’t include dedicated revenue streams. He said not having P3 legislation on the books since late 2015 has limited the state’s options to address aging infrastructure.

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Murphy signs executive order creating Jobs and Economic Opportunity Council

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BY Michael Hill, Correspondent
February 27, 2018, 5PM EST

At the International Union of Operating Engineers Training Center Local 825, Gov. Phil Murphy painted New Jersey’s economy as stuck in the mud.

“For eight years, we have slogged behind every competitor state in multiple categories,” said Murphy.

His list went on – challenging his new role to lead the state to a stronger and fairer economy.
“It’s time for New Jersey to get back to leading by doing,” said the governor.

With the stroke of a pen, the governor signed another executive order, his 12th in six weeks. This time, creating the Jobs and Economic Opportunities Council within the Governor’s Office made up of the lieutenant governor and several cabinet members.
“Specifically, I’m directing the council to analyze state and national economic trends and data to design the policies needed to attract, expand and retain good jobs. I am asking them to identify potential funding sources,” said Murphy.

The governor said the council’s scope will be broad and do what he’s already ordered his cabinet to begin doing – streamline state government by considering how best to use technology.

“Turning New Jersey around must begin with fixing our economy, making us a place that creates jobs and new opportunities in innovation and infrastructure” continued Murphy.

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Push for Prevailing Wages at State Transit Hubs Passes Assembly

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By Alyana Alfaro * 06/22/17 5:43pm

The New Jersey General Assembly on Thursday passed legislation requiring that subcontracted Newark Liberty Airport, Hoboken Terminal and Newark Penn Station employees be paid prevailing wages, a move that is estimated to bring wages for those employees up to $17.98 per hour according to the New Jersey Business and Industry Association.

The bill, A-4870/S-3226, was sponsored in the Assembly by Democrats including Assembly Speaker Vincent Prieto (D-Hudson) and in the state Senate by Democrats including Senate President Steve Sweeney (D-Gloucester). It passed the Assembly on Thursday with 51 yes votes, 23 no votes, and one abstention and will now go to the state Senate for consideration. The measure passed without Republican support.

“When you look at Liberty International, it is one of our biggest employers,” said Prieto (D-Hudson) from the Assembly floor prior to the bill being posted for a vote. “When these individuals live near these centers that should be an economic engine for the region, they should be able to be paid fair wage that is put back into the economy.”

The New Jersey minimum wage is currently $8.38 per hour. Subcontracted workers at Newark Airport make $10.20 per hour. Labor groups around the country are pushing for those wages to be boosted to $15 per hour, a figure lower than NJBIA estimates for the prevailing wage bill.

While Democrats in the legislature favor the initiative, the NJBIA says that the sharp wage boost would “substantially increase the costs for business, which will then be passed along to consumers.” While they estimate the $17.98 prevailing wage for these workers under the legislation, NJBIA says that mandated sick leave, health insurance and paid vacation days would have the same effect as boosting the minimum wage to $22.25 an hour. Michele Siekerka, President and CEO of NJBIA, said that by including such “expensive fringe benefits” as part of the legislation, the bill also eliminates collective bargaining and contract negotiation.

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Workers building high-end apartments in Worcester claim wage theft and payroll fraud

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By Melissa Hanson
on April 25, 2017

 

Five local carpenters who were working on a mixed-use building that includes high-end apartments in downtown Worcester are claiming that they were victims of wage theft and payroll fraud.

The carpenters, who were employed by P&B Partitions, a contractor based in West Berlin, New Jersey, say they were victims of wage and hour violations. Three of the carpenters have filed wage complaints with the Massachusetts Attorney General’s office, according to a statement from the New England Regional Council of Carpenters.

According to the wage complaints, P&B did not pay the carpenters for all hours worked and frequently paid the workers for overtime hours in cash and at less than the rate required by state law.

Dave Minasian, a spokesman for the New England Regional Council of Carpenters, said the amount of money the workers claim they were bilked of is not being released at this time.

P&B said they did not have anyone immediately available to comment on the complaint. Minasian said P&B has not responded to his organization.

The Worcester Carpenters Union is assisting the workers in recovering the allegedly lost wages.

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Illegal ‘underground’ construction costing NJ taxpayers millions, report finds

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By: Andrew Polk
Posted: Oct 08, 2016 04:26 PM CDT

The state of New Jersey is losing millions of uncollected tax dollars every year because of a robust and growing underground construction economy, according to a new report by researchers at the Stockton University William J. Hughes Center for Public Policy.

The report finds this illegal construction activity illegally undercuts companies that follow the rules, decreases work opportunities for union workers and may be responsible for the state’s declining construction wages compared to other states.

According to John Froonjian, one of the authors of the Stockton report and a senior research associate and manager of the Stockton Polling Institute, what’s happening is very significant and very costly to the state.

“The construction underground economy, it’s probably worth at least $640 million and our ranges go from half a billion to $1.2 billion dollars and it involves 35,000 workers across New Jersey,” he said.

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Working to Stop Wage Theft

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6-6-16
By Michael Hill, Correspondent

Felix Lema said a construction job boss stole his wages.

Make the Road New Jersey recently helped him recover some of his pay.

“I had been owed wages for a long time by my employer. I asked him everyday please pay me, please pay me. One day he said you need to go home now you need to stop asking me and he gave me a ride home. Instead of taking me home he drove me to the Elizabeth Immigration Detention Center where the threat was deportation,” said Sara Cullinane, state director of Make the Road New Jersey who was translating Lemas’ words.

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The Senate Labor Committee just approved Senate bill 1396. It would allow wage theft victims to have their claims not only heard by the state Labor Department but in municipal and superior courts, allow disorderly persons’ charges against violators and increase the statute of limitations to recover unpaid wages from two to six years.

New Jersey Working Families – the same organization behind raising the minimum wage – is leading the charge on wage theft protection.

“We have to make sure that every worker actually receives compensation,” said New Jersey Working Families Executive Director Analilia Mejia.

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Construction boss convicted of not paying fair

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1:23 PM, NOVEMBER 20, 2014 

Attorney General Eric T. Schneiderman today announced the conviction and sentencing of Leonid Fridman for failing to pay legally required wages to his workers on a Port Authority of New York and New Jersey construction project.

Fridman pled guilty to the felony crimes of grand larceny in the second degree and violation of prevailing wage requirements of New York State Labor Law.  As a condition of the plea, Fridman agreed to pay $200,000 in restitution to underpaid workers and prohibition from working on public works projects for five years.  Fridman was sentenced to five years of probation.

“Mr. Fridman is being held accountable for stealing wages from workers who renovated parts of JFK,” Attorney General Schneiderman said. “My office will continue to take strong action, including filing criminal charges, against employers who violate New York’s labor laws, steal taxpayer dollars and violate the public trust.”

Based upon court filings and statements in court, Fridman, 60, owned and operated Millennium Commercial Corp., a Brooklyn-based company that performed tile work.

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Taking a Bigger Bite out of Wage Theft in the Garden State

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Two central New Jersey towns are attempting to crack down on employers who illegally withhold wages from workers — tying local business licenses to compliance with state wage laws.

The new rules, adopted by New Brunswick in December and Princeton on Monday, give the towns the ability to refuse to renew the license of businesses that have been found guilty either in court or by the state Department of Labor of wage theft — not paying for all hours worked, not paying at least the minimum wage, or not paying overtime.

Activists who helped craft the local ordinances say they could be a model for other communities and are reaching out to expand the wage-theft provisions to other towns. They also hope the local efforts can spur action on a state bill — A1317 — that would make it easier for workers to file wage-theft claims and would increase penalties on those convicted of wage theft.

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