SENATE LABOR COMMITTEE
SENATE, No. 1450
with committee amendments
STATE OF NEW JERSEY
DATED: MARCH 4, 2013
The Senate Labor Committee reports favorably and with committee amendments Senate Bill No. 1450.
As amended by the committee, this bill creates a presumption that a work arrangement in the drayage trucking or parcel delivery trucking industry is an employer-employee relationship unless the party receiving the services can overcome the legal presumption of employment. Under the bill, trucking services performed in the drayage trucking industry or parcel delivery industry by an individual for remuneration are deemed to be employment unless and until it is shown to the satisfaction of the Department of Labor and Workforce Development that:
1. The individual has been and will continue to be free from control or direction over the performance of that service, both under his contract of service and in fact;
2. The service is either outside the usual course of the business for which the service is performed, or the service is performed outside of all the places of business of the employer for which the service is performed; and
3. The individual is customarily engaged in an independently established trade, occupation, profession or business.
Any employer who misclassifies individuals in the drayage trucking or parcel delivery trucking industries as independent contractors and fails to pay wages, benefits or taxes required for employees by the unemployment insurance (UI) law, the “Temporary Disability Benefits Law," the "New Jersey Gross Income Tax Act," the workers’ compensation law, or the "New Jersey State Wage and Hour Law," is:
1. Guilty of a disorderly persons offense and subject to a fine of from $100 to $1,000, imprisonment of 10 to 90 days, or both. Each week, in any day of which an employee is misclassified, and each misclassified employee, shall constitute a separate offense.
2. If the failure is knowing, guilty of a crime of the second degree if the contract amount is for $75,000 or more; guilty of a crime of the third degree if the contract amount exceeds $2,500, but is less than $75,000; and guilty of a crime of the fourth degree if the contract amount is for $2,500 or less. The violator is also deemed to have caused loss to the employees in any amount by which the employees were underpaid in connection with the misclassification and is subject to various provisions of the criminal code regarding fines and restitution to victims. Administrative penalties may also be assessed of up to $2,500 for a first violation and up to $5,000 for each subsequent violation.
The State’s current UI law already uses the three-point test indicated above to determine whether an individual truck driver is an employee or independent contractor, but that law exempts various groups of workers, including certain drivers of trucks weighing 18,000 pounds or more who own, lease or finance the truck and paid based on gross revenue or distance and weight. The bill amends the UI law to eliminate that exemption in cases of drayage truck operators and parcel delivery truck operators, thus making them subject to the three-point test. A drayage truck operator is defined as the driver of a truck weighing more than 33,000 pounds which operates on or transgresses through port or intermodal rail yard property for the purpose of loading, unloading, or transporting cargo. A parcel delivery truck operator is defined as a driver of a vehicle used in the business of small package delivery, not including newspaper delivery.
Finally, the bill makes it unlawful to retaliate against anyone for exercising rights protected under the bill, including the rights: to file a complaint or inform any person about an employer's noncompliance; to inform any person of those rights under the act; and to assist in the assertion of those rights.
The committee amendments:
1. Clarify that, for the purposes of the bill, the “operator” of a drayage truck or parcel delivery truck refers only to the individual who drives the truck. The amendments delete persons or entities that control the operation of the truck from the bill’s definition of operator;
2. Provide that the bill’s provisions regarding misclassification of employees as independent contractors apply to the workers’ compensation law;
3. Provide that the bill’s provisions regarding misclassification of employees as independent contractors do not apply to the prevailing wage law; and
4. Stipulate that the bill’s definition of a “parcel delivery truck operator” does not include an individual delivering newspapers.