SENATE BUDGET AND APPROPRIATIONS COMMITTEE
ASSEMBLY, No. 5839
STATE OF NEW JERSEY
DATED: JANUARY 6, 2020
The Senate Budget and Appropriations Committee reports favorably Assembly Bill No. 5839 (1R).
This bill provides for the assessment of penalties for violations of State wage, benefit and tax laws in connection with the misclassification of employees.
The bill authorizes the Commissioner of Labor and Workforce Development, in the case of a violation of a State wage, benefit and tax law in connection with failing to properly classify employees, to impose the following penalties in addition to any other remedies or penalties authorized by law. The commissioner is authorized to assess and collect:
1. An administrative “misclassification penalty” up to a maximum of $250 per misclassified employee for a first violation and up to a maximum of $1,000 per misclassified employee for each subsequent violation; and
2. A penalty to be provided for the misclassified worker of not more than five percent of the worker’s gross earnings over the past 12 months from the employer who failed to properly classify them. The employer may be required to make these penalty payments to the commissioner to be held in a special account in trust for the worker, or paid on order of the commissioner directly to the worker.
As reported, this bill is identical to Senate Bill No. 4230, as amended and reported by the committee.
The Office of Legislative Services (OLS) estimates that the bill may result in an increase in revenues from the collection of penalties for violations of State wage, benefit, and tax laws in connection with the misclassification of employees.
The OLS notes that, if enacted, the bill may result in an increase, likely insignificant, in administrative State expenditures associated with the enforcement of the bill’s provisions. Under the bill, any revenue collected must be used to offset any administrative expenditures.