New Jersey Bills Seek to Punish Misclassification of Trucking Industry Employees

Two pending parallel bills (A1578 and S1450) seek to impose severe penalties on certain employers in the trucking industry that misclassify their trucking services employees as independent contractors. If signed into law, the bills would create a presumption of employer-employee relationship (rather than independent contractor relationship) in the drayage trucking or parcel delivery industry unless the New Jersey Department of Labor and Workforce Development is satisfied that: (1) the operator has control and discretion over the performance of the service, both under his contract of service and in fact; (2) the service is either outside the employer’s usual course of business or outside of all the places of business of the employer; and (3) the operator is customarily engaged in an independently established trade, occupation, profession, or business (the well known “ABC” test under the unemployment compensation law).

The bills would allow the imposition of second degree criminal penalties (akin to aggravated assault, sexual assault, manslaughter, and vehicular manslaughter) as well as steep financial penalties on trucking industry employers (including officers, agents, superintendents, foremen, and employees) who misclassify such workers as independent contractors. The bills also would allow individuals to file individual or class civil actions against employers (for damages and attorneys’ fees), and would allow labor organizations to bring class actions. The proposed laws also would prohibit retaliation for exercising rights under the law.