A1526 ALA Statement 3/12/18

ASSEMBLY LABOR COMMITTEE

STATEMENT TO

ASSEMBLY, No. 1526

STATE OF NEW JERSEY

DATED: MARCH 12, 2018

The Assembly Labor Committee reports favorably Assembly Bill No. 1526.

This bill provides that a freelance worker must be paid the compensation earned according to work terms agreed to by the freelance worker and its client, and requires the Department of Labor and Workforce Development to act as a regulatory agency in certain circumstances regarding these work agreements. The bill defines “client” as a sole proprietorship, partnership, corporation, limited liability company, association or other business entity or a nonprofit organization contracting with a freelance worker for compensation equal to or greater than $600. The term “client” does not include a person or any governmental entity, or a general acute care facility licensed by the Commissioner of Health and Senior Services.

The bill provides that the following categories of workers are not considered freelance workers, and are exempt from the provisions of the bill:

1. licensed medical professionals;

2. persons engaged in the practice of law;

3. New Jersey Real Estate Commission licensees;

4. certain sales representatives that contract with manufacturers; and

5. any person subject to a collective bargaining agreement that specifies wages and conditions of employment.

Under the bill, a freelance worker must be paid the compensation earned in accordance with the agreed work terms, which must be reduced to writing. If a freelance worker and client did not agree on a date for payment of compensation earned or a mechanism by which that date is determined, then the freelance worker must be paid the compensation earned not later than 30 days after the completion of the freelance worker’s services under the written contract. The bill also provides that the contract must be signed by the freelance worker, kept on file by the client for a period of not less than six years, and made available to the Commissioner of Labor and Workforce Development upon request.

It is a violation of the bill if a client is found to threaten, intimidate, discipline, harass, deny a work opportunity to or discriminate against a freelance worker, or take any other action that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, exercising or attempting to exercise any right provided under the bill, or from obtaining a future work opportunity because the freelance worker has done so.

The bill provides that any freelance worker may file with the commissioner a complaint regarding a violation of the provisions of the bill by a client, for an investigation of the complaint and a statement setting the appropriate remedy, if any. The bill provides that the commissioner may bring any legal action necessary, including administrative action, on behalf of any freelance worker that alleges a violation of the provisions of the bill. The commissioner may also assess against the client an amount as liquidated damages, unless the client proves a good faith basis for believing that its violation was in compliance with the provisions of the bill. Liquidated damages must be calculated by the commissioner as no more than 100 percent of the total amount of the underlying contract.

The bill also provides that if the commissioner determines that a client has failed to pay the compensation of its freelance workers, the commissioner shall issue to the client an order directing payment, which will describe the nature of the alleged failure to pay.

Each freelance worker who files a complaint regarding a violation of a provision of this bill will be provided with a description of the anticipated processing of the complaint, including the investigation, case conference, potential civil and criminal penalties, and collection procedures by the commissioner, in addition to a referral to a navigation program established by the commissioner. Each freelance worker and any representative of the freelance worker will be notified in a timely manner by the commissioner of the following: any case conference before it is held, with the opportunity to attend; any award, collection of back compensation, civil penalties, any intent to seek criminal penalties; and a notification of the outcome of any prosecution.

The bill provides that any client who does not pay the compensation of all of its freelance workers in accordance with the provisions of this bill, and the officers, agents, or representatives of any client who knowingly permit the client to violate the provisions of this bill, will be guilty of a disorderly persons offense for a first offense, and in the event that any second or subsequent offense occurs within six years of the date of conviction for a prior offense, will be guilty of a crime of the fourth degree. A disorderly persons offense is punishable by a term of imprisonment up to six months or a fine not to exceed $1,000, or both. A crime of the fourth degree is punishable by a term of imprisonment up to 18 months or a fine not to exceed $10,000, or both.

The bill also provides that a freelance worker alleging a violation of a provision of the bill may bring an action in any court of competent jurisdiction for certain damages. The remedies provided by the bill with respect to a private action brought by a freelance worker, and any other remedies provided in the bill, may be enforced simultaneously or consecutively so far as not inconsistent with each other.

Finally, the navigation program established by the commissioner under the bill must include assistance from a natural person by phone and electronic mail and shall also include information accessible via an Internet website maintained by the Department of Labor and Workforce Development. The navigation program must provide the following: general court information and information about procedures under the bill; information about available templates and relevant court forms; general information about classifying persons as employees or freelance workers; information about obtaining translation and interpretation services and other courtroom services; a list of organizations that can be used for the identification of attorneys; and other relevant information, as determined by the commissioner, related to the submission of a complaint by a freelance worker or the commencement of a civil action under the provisions of the bill by a freelance worker.

This bill was pre-filed for introduction in the 2018-2019 session pending technical review. As reported, the bill includes the changes required by technical review, which has been performed.