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Articles Tagged with New Jersey Wage Payment law

On June 29, 2020, the U.S. District Court for the District of New Jersey ruled that consumer goods giant, Amazon, must defend itself in a class action lawsuit brought by warehouse employees claiming violations of wage and hour laws arising from Amazon’s mandatory post-shift security screenings.

IMG_4764-300x165According to the Complaint, at the end of the workday, Amazon’s warehouse employees must submit to a lengthy security screening before they are permitted to leave Amazon’s premises. The lawsuit alleges that the security screening requires hundreds of employees to wait together before each individual must walk through a metal detector and place his or her personal items on a conveyor belt to be scanned via x-ray. If, after the initial screening, Amazon determines that additional screening is necessary, the employee must then report to the secondary screening area for a manual search of the employee’s person. These screenings are intended by Amazon to prevent theft of goods and can take approximately half an hour to complete after the employees have already clocked out of their shifts. Employees are not compensated for the time spent in these screenings.

The Complaint also alleges that the same security screening procedure is required of any employee that wishes to leave Amazon’s premises for his or her unpaid, 30 minute lunch break. Given the vastness of Amazon’s parking lot and remoteness of its premises, the screening allegedly prevents employees from going off site for their meal breaks. The lawsuit claims that Amazon violated federal and state wage and hour laws by failing to count time spent in these mandatory screenings as “hours worked” for purposes of calculating wages and overtime.

Whether a worker is afforded protection under federal and New Jersey employment laws is often determined whether they are an employee or an independent contractor. Many employment laws provide protection only to employees, with little to no protection for independent contractors. For example, employees have access to wage theft protection, overtime pay, workers’ compensation, unemployment benefits, family leave laws, health and safety, and anti-discrimination protections, whereas independent contractors may not. In situations where a worker is misclassified as an independent contractor, rather than an employee, that worker can be deprived of the protections that they are entitled to under the law.

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Classification of whether a worker is an employee or an independent contractor has become more and more important in our going growing technological economy. The growing accessibility of technology provides a vast digital marketplace that is now at the fingertips of millions of consumers. App-based companies, such as Uber, Lyft, and Postmates have taken advantage of this accessibility and services quickly and conveniently. To accomplish this goal, these companies typically elicit services from workers on a job-by-job basis, commonly referred to as “gigs”. As this “gig” economy expands and becomes a more viable source of income for many workers, it brings to the surface questions with respect to the classification of the workers engaging in it.

As a result of the increasing frequency of worker misclassification, New Jersey organized the Task Force on Employee Misclassification to investigate and address the issue.  In its July 2019 report, the Task Force found that while prominent within the “gig” economy, this misclassification extends to workers many sectors, especially those in labor-intensive and low-wage positions. In fact, Federal studies and state-level agency audits suggest that between 10 and 30 percent of employers have misclassified employees as independent contractors, a number that has grown by upwards of 40% in recent years. In addition to depriving employees of protections under the law, these employers have avoided payment of income taxes as well as contributions to social programs, such as Social Security, on the misclassified employees.

A recent gubernatorial task force has released a report addressing a major problem that many employees are facing across the state of New Jersey. According to the Report of Governor Murphy’s Task Force on Employee Misclassification, 12,315 employees were improperly classified as independent contractors, rather than employees, in 2018. This misclassification can cause major issues for workers by limiting their access to essential legal protections provided to New Jersey employees. There has been a growing trend of misclassification, with the number of employees misclassified as independent contractors increasing by 40% over the past decade. Unfortunately, this trend continues to create problems for workers across the State to this day, which is why Governor Murphy’s task force was so greatly needed.

New Jersey Employment Laywers
Generally, in order to determine whether a worker is properly classified as an employee or an independent contractor for wage payment law and wage and hour law purposes, New Jersey courts utilize what is known as the ‘ABC Test.’ The ABC Test starts off with a presumption that a worker is an employee. An employer can rebut this presumption only if they can establish the existence of each of the following three factors:

  • The worker is free from control or direction in the performance of their services, both under the contract and in fact;
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