back to top

Employment Law Blog

Categories: Employee Benefits

1099 vs. W2

March 25, 2019

The New Jersey Department of Labor and the New Jersey Division of Consumer Affairs have reminded employers that under N.J.S.A. 43:21-1 et seq., the New Jersey Unemployment Compensation Law (NJUCL), if a service is performed for remuneration or under any contract of hire, written or oral, express or implied, it is considered to be covered employment, unless the potential employer is able to establish the following with regard to the service at issue and the individual providing that service:

(A) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and
(B) Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
(C) Such individual is customarily engaged in an independently established trade, occupation, profession or business.

N.J.S.A. 43:21-19(i)(6).

This statutory criteria, commonly referred to as the "ABC test", is written in the conjunctive. Therefore, where a putative employer fails to meet any one of the three criteria listed above with regard to an individual who has performed a service for remuneration, that individual is considered to be an employee and the service performed is considered to be employment subject to the requirements of the NJUCL; in particular, subject to N.J.S.A. 43:21-7, which requires an employer to make contributions to the unemployment compensation fund and the State disability benefits fund with respect to its employees.

In the event that the State determines an “Independent Contractor” is really an employee, the employer will be responsible for payroll taxes and unemployment contributions for the misclassified employee. If the employer maintains any benefit plans such as 401(K) or medical, the misclassified employee may have retroactive claims for benefits.

If you are contacted by the New Jersey Department of Labor or the United States Department of Labor, the attorneys at Mandelbaum Salsburg are happy to be of assistance and have extensive experience in dealing with these examinations.

Attorney: Martin Hauptman
Related Practice: Labor and Employment
Category: Employee Benefits

Time To Review Your Company's Personnel Policy

November 14, 2018

As the weather gets colder and the days shorter, the end of the year can’t be too far away. Now is a good time to start reviewing your Company’s personnel policies so that your house can be in order to start the new year.

Here are a few questions for your HR team to answer to determine whether you need outside counsel to review your personnel policies and practices:
  1. When was the last time your Employee Manual was reviewed? There have been a number of significant changes in the law that might impact your policies.
  2. Does your Company’s sick leave policy comply with NJ’s paid sick leave law? The new law took effect October 29th.
  3. Has the Company reviewed its pay policies? There were significant changes this year in New Jersey concerning equal pay. In just the past few days Hewlett Packard was hit with a gender pay gap lawsuit.
  4. Do you have a workforce in New York state? If so, has your Company provided them with mandatory sexual harassment prevention training? Has your Company issued a compliant policy? This law became effective October 9th and applies to all employers. It requires annual training. New Jersey also requires training of managers and staff members.
  5. Does your Company require employees to arbitrate disputes? When was the last time your arbitration policy was reviewed? There have been some significant changes in this area. Both Google and Facebook recently announced that they will not require employees to arbitrate sexual harassment claims.
  6. Does your Company require releases when severance is paid? Do the agreements require confidentiality? If so, it might interfere with the Company being able to deduct the severance payments as a business expense.
The Labor & Employment Law Group at the Firm is available to answer any questions you may have or help bring your Company into compliance.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits

It Is Time To Take Your Company's Temperature Concerning HR Compliance

May 29, 2018

How healthy is your Company? Does it comply with all of its obligations under ever-expanding employment laws? Considering all of the recent developments in New Jersey and New York employment law, now is an appropriate time to take your Company’s temperature.

If your Company has an employee manual, now is the time to update it especially considering that New Jersey and New York recently passed legislation dealing with paid sick leave which may impact your current sick leave policy.

As a result of the #Metoo movement, and as reported recently in this blog, there have been significant changes concerning having employees sign settlement agreements in sexual harassment cases or separation agreements containing non-disclosure/confidentiality provisions waiving these claims. Both New York and federal law have changed in this regard. It is, therefore, important to review any form releases your Company uses when terminating employees.

As also reported previously in this blog, the law also has changed concerning equal pay. In New Jersey, it will not only apply to women who are paid less than men but also all other protected classes in the New Jersey Law Against Discrimination. It is, therefore, important to take your Company’s temperature with regard to employee pay.

Lastly, based upon an executive order recently signed by Governor Murphy organizing a task force to review the issue of misclassification of workers, we expect a crackdown on employers who misclassify workers as independent contractors. Now is the time to review those relationships as well.

In summary, having experienced legal counsel help in taking your Company’s temperature now will enable your Company to avoid costly litigation not too far down the road.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits