ATLANTIC CITY — Gov. Phil Murphy praised the strength of labor unions Tuesday before announcing he plans to sign a bill that would protect employees from job site violations.
Murphy addressed a crowd of union leaders and delegates at the New Jersey State Building and Construction Trades Council’s annual convention at Hard Rock Hotel & Casino Atlantic City, focusing on a report issued by the Task Force on Employee Misclassification that sought to curtail the practice of misclassifying workers as independent contractors instead of employees.
“Employee misclassification hurts hardworking New Jersey workers and prevents them from receiving the benefits and the pay they worked for and deserve,” Murphy said.
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In 2018, Murphy issued an executive order establishing a 12-person, multi-department task force to examine existing employee-classification laws, develop best practices to increase information and enforcement and make recommendations for compliance with the law.
The task force held public forums in Newark, New Brunswick and Atlantic City, where it heard from scores of employees, employers, subject-matter experts and others.
After 14 months, Murphy released the report at Tuesday’s convention, which included 16 recommendations to better protect contracted employees.
“Basically, when an employee is misclassified, they are given a 1099 (employment form) even though they’re not an independent contractor,” said state labor Commissioner Robert Asaro-Angelo, “which makes them lose their rights to benefits of unemployment, temporary disability, earned sick time, minimum wage, overtime, all kinds of work-related benefits.”
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Asaro-Angelo added that when workers and employers don’t pay into the state’s unemployment trust find, it hurts the stability of the fund.
“Right now, we are not solvent,” Asaro-Angelo said. “We need every dollar going in that to save and make sure we have the money there for workers if an economic downturn comes.”
According to the report, during an audit of 1% of New Jersey businesses, the Labor Department found 12,315 workers were misclassified, resulting in $462 million in underreported wages and $14 million in lost contributions to unemployment, disability, family leave and workforce programs.
Misclassification is especially prevalent in construction, janitorial services, home care, transportation, trucking and delivery services, and other labor-intensive, low-wage sectors, the report found.
Murphy ended his speech by saying he intends to return to his desk and sign a bill that will allow the DOL to issue stop-work orders if violations are found related to prevailing wages and construction workers’ employment.
“Our new vision is this — it’s not enough to have good laws on the books if you don’t have a governor and administration who will step up and enforce,” Murphy said, “and I’m proud to be that.”