Understanding the differences between independent contractors and employees is important. Issues such as those of taxation and liability stem from the relationship between an employer and a contractor or employee.
In New Jersey, the Department of Labor sets out an ABC test for determining responsibility for unemployment and hour and wage requirements. The test is as follows:
- Is the individual free from control and direction over the performance of services, under any contract for the service and in actuality
- Does the service rendered occur outside the usual course or location of the business? Is the contractor working in your office or at another place?
- Is the worker engaged in an independently established profession or business or is this the only job that the individual performs?
The burden is on an employer to prove that an individual worker is an independent contractor and not an employee.
Misclassification of employees as independent contractors can be expensive. Should an employer misclassify an employee, the employer may have to do the following:
- Reimburse the individual for wages they are entitled to under the Fair Labor Standards Act, including the minimum wage and overtime for the position
- Arrange for payment of back taxes and penalties for federal and state income taxes, Medicare, Social Security, and any unemployment benefits
- Pay workers compensation benefits of any misclassified employee
- Provide a misclassified employee with all benefits such as health insurance and retirement plans.
A skilled NJ wage and hour attorney can assist you with making a determination of whether you have an employee or independent contractor relationship.
Neil H. Deutsch has been practicing law for over 35 years and is known as a skilled negotiator in employment and discrimination law. He believes in a bottom-line approach of risk analysis and cost effectiveness for his clients. "Case evaluation is something we take seriously," says Mr. Deutsch who seeks top net dollar for his…
Bruce L. Atkins is the Senior Managing Partner at Deutsch Atkins & Kleinfeldt P.C., a prominent plaintiff employment law firm in the tri-state area. Mr. Atkins believes employees’ rights should be aggressively pursued when they’ve been wrongfully dealt with by their employers. He brings this philosophy to his practice when considering each case and its…
Adam J. Kleinfeldt joined Deutsch Atkins & Kleinfeldt, P.C. in March of 2015. He primarily represents individuals in employment litigation such as discrimination, retaliation and whistle blowing matters. He has extensive experience in all phases of the litigation process. Adam has obtained significant results for his clients, including a $525,000 jury verdict in a sexual…
Debra M. McGarvey joined Deutsch Atkins & Kleinfeldt, P.C. in December 2019. She has extensive experience defending employees and employers in state and federal court in employment litigation matters. She has represented clients on various issues arising out of the New Jersey Law Against Discrimination (NJLAD), the New Jersey Conscientious Employee Protection Act (CEPA), the…
Carly Skarbnik Meredith, Esq. is a Partner at the firm. Carly has focused her career exclusively in the field of employment law. She has a plethora of experience representing both employees and employers with their employment issues, needs, and concerns. She believes representing both employees and employers has made her an extremely well-rounded client advocate.…
