Senate Approves Worker Protections For Drivers Misclassified As ‘Independent Contractors’

Misclassification of Short-Distance & Parcel Delivery Truckers Compromises Drivers’ Rights & Safeguards

TRENTON – The misclassification of short-distance and parcel delivery truckers as independent contractors by their employers would be rectified by legislation sponsored by Senate Majority Leader Loretta Weinberg that was approved by the Senate on Thursday, giving the drivers the protections and rights afforded most employees.

The bill, S-1450, entitled the “Truck Operators Independent Contractor Act,” would prevent trucking companies from misclassifying truckers as a way of avoiding workers’ rights laws and the employer responsibilities, including unemployment and Social Security contributions.

“This is about employers who are operating outside the rules and taking advantage of their drivers in ways that can deny them basic rights,” said Senator Weinberg. “Employee misclassification has been used to refuse workers the protections of state and federal laws. This includes the right to unemployment and disability benefits and the protection of laws on overtime and workers compensation.”

Under the bill, “drayage,” or short-distance truckers, and parcel delivery drivers could not be classified as “independent contractors” unless the employers can show that the workers are truly independent. The businesses would have to demonstrate to the New Jersey Department of Labor and Workforce Development that the workers are free from their day-to-day control, that the service is outside the usual course or place of business and that the employee is customarily engaged in an independent trade or occupation.

“The misclassification also puts the businesses that play by the rules at a disadvantage which is unfair and bad for the competitive marketplace,” said Senator Weinberg. “If they don’t make the required payments for unemployment, Social Security, Medicare or the temporary disability fund, everyone loses. There should be a level playing field that includes the fair and equal treatment of all workers.”

A 2009 study by the General Accounting Office found that an estimated 15 percent of employees nationwide are misclassified as independent contractors. A 2005 report by the New Jersey Department of Labor and Workforce Development estimated that 28,200 workers in New Jersey were wrongly classified.

Under the bill, the intentional misclassification of these workers would subject violators to fines up to $15,000 and imprisonment up to one year for the first violation and fines up to $30,000 and up to two years in jail for subsequent, willful violations. The penalties mirror those already on the books under the “Construction Industry Independent Contractors Act” of 2007.

The bill, sent to the governor with a vote of 21 to 17, would also protect workers from retaliation for exercising their rights or for reporting any suspected violations.