Labor & Employment Insights — Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events

NJ Attorney General and Commissioner of Labor Put Employers Who Misclassify Employees as Independent Contractors on Notice: We Are Coming After You

Published on: December 21, 2023 | by Kathleen M. Connelly

In a December 11, 2021 press release, New Jersey Attorney General Matthew Plotkin and New Jersey Department of Labor Commissioner Robert Asaro-Angelo announced the filing of the first lawsuit under a 2021 law that enhances the State’s authority to curtail illegal misclassification of workers as independent contractors through actions such as direct suits in the Superior Court, work-stoppage orders and enhanced penalties.

“When employers unlawfully and callously toss their workers into the ‘independent contractor’ category they are not only depriving them of a steady paycheck, they are also stripping them of earned sick leave, workers compensation, minimum wage, and more,” said AG Plotkin. “These are national, profitable corporations with deep pockets who are padding their profits with illegal labor schemes, and they seem to have no plans to stop this kind of behavior.” Labor Commissioner Asaro-Angelo cautioned that companies profiting through misclassification “have been put on notice. We are proud to have the strongest worker protection laws in the country, which also safeguard employers who play by the rules. Misclassifying employees will not be profitable, nor overlooked.”

Under New Jersey law, workers are presumed to be employees unless the employer can establish the three criteria of what is commonly called the “ACBC test”: 1) the worker is largely free from the control or direction of the company over the performance of the work; 2) the type of work being performed by the worker is outside the company’s usual course of business, or is performed outside the company’s place of business; and 3) the worker has their own independent trade, job, profession or business. Treating workers who do not meet these stringent criteria deprives them of the rights and benefits afforded to employees, including minimum wage, overtime, workers compensation benefits, temporary disability benefits, earned sick leave, job protected family leave, equal pay, unemployment payments, and statutory protection against unlawful discrimination.

$15M Verdict for Surgeon Who Claimed Employer Mishandled its Investigation into Sexual Assault Allegations against Him and was the Product of Anti-Male Bias

Published on: December 20, 2023 | by Kathleen M. Connelly

In a retrenchment of the #MeToo movement’s maxim that “all women must be believed,” a federal jury in Philadelphia found that a University engaged in anti-male bias when it investigated female resident’s sexual assault claim and awarded the accused male employee a whopping $15 million dollars in damages.

The Facts:

The plaintiff, Dr. John Abraham, was the Director of the Musculoskeletal Oncology Center at Thomas Jefferson University Hospital, a professor at Thomas Jefferson University and a partner in the Rothman Orthopedic Institute. After a pool party hosted by Dr. Abraham at his home, he engaged in sexual activity with a subordinate female resident physician. Dr. Abraham claims he then filed a report with the University that the resident had intoxicated him and aggressively pursued sex without Dr. Abraham’s consent. Dr. Abraham maintains that this complaint was not acted upon. Thereafter, the female resident filed a report with the University alleging she was raped by Dr. Abraham.

USDOL Proposes Significant Increase in the Salary Threshold for Exempt Employees – How Will it Affect Your Business?

Published on: September 8, 2023 | by Kathleen M. Connelly

On August 30^th, the U.S. Department of Labor (DOL) issued a long-awaited proposed rule that if adopted, will substantially expand the ranks of workers eligible for overtime payments for work in excess of 40 hours, as required by the Fair Labor Standards Act (FLSA).

Under present FLSA regulations, certain “white collar” workers who meet minimum salary requirements and perform specified duties may be classified as “exempt” employees ineligible for overtime. The current salary threshold to qualify for the white collar exemptions is $35,560 annually, and $107,432 for the “highly compensated employee” exemption. The proposed rule would increase that minimum salary threshold to $55,068 per annum, and $149,988 for highly compensated employees.

How Businesses Will Be Affected

Changes to Form I-9: What Employers Need to Know

Published on: August 30, 2023 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

The Immigration Reform and Control Act (IRCA) of 1986 requires all U.S. employers, regardless of size, to complete a Form I-9 upon hiring a new employee to work in the United States. This form serves to verify an employee’s identity and ability to work in the country.

On August 1, 2023, a new Form I-9 was released, which employers must begin to use no later than October 31, 2023. Additionally, employers that verified remote hires’ Form I-9 identity and work authorization documents virtually during the COVID-19 pandemic are required to physically inspect those documents by August 30, 2023. Failure to comply with Form I-9 requirements may result in civil and criminal fines and penalties. It is therefore critical that employers understand and implement Form I-9 requirements in accordance with these recently established deadlines as set forth herein.

Completing Form I-9

The Ever-Shifting Sands at the NLRB: Board Adopts New Standards for Assessing the Lawfulness of Work Policies and Independent Contractor Relationships

Published on: August 18, 2023 | by Kathleen M. Connelly

The National Labor Relations Board (“NLRB” or “Board”) is responsible for enforcement of employee rights under Section 7 of the National Labor Relations Act (NLRA) to engage in protected concerted activity, such as organizing unions, discussing wages and discipline, and other terms and conditions of employment.

Many employers are not mindful of the fact that these rights extend to both unionized and non-union workplaces. With the decline in union membership, the NLRB has increasingly turned its focus away from unionization issues to workplace practices that may run afoul of employee rights under the NLRA, as illustrated by two recent decisions from the Board.

The Landmark Stericyle Decision’s Impact On Employee Handbooks and Other Workplace Rules

Amendments To NJ’s Unemployment Compensation Law Imposes Additional Reporting Obligations and Increased Penalties For Noncompliant Employers

Published on: August 18, 2023 | by Kathleen M. Connelly

Under New Jersey’s Unemployment Compensation Law, employers have long been obligated to provide separating employees with a Form BC-10 which includes instructions for claiming unemployment benefits, and to provide a reason for the employee’s termination when requested by the NJ Division of Unemployment and Temporary Disability Insurance (the “Division”). Because employers historically ignored or were ignorant of these requirements, the State Legislature amended the Unemployment Compensation Law to include additional reporting requirements and enhanced penalties for those who continue to ignore these obligations. These changes went into effect on July 31, 2023.

The Employer’s Reporting Obligations

Regardless of the reason for the employee’s separation, immediately upon a separation of employment the employer must:

New York Employment Law Roundup: Recent Changes That Employers Must Know

Published on: August 14, 2023 | by Kathleen M. Connelly

Mandatory Sexual Harassment Policy Requirements

Since October 2018 New York has mandated employers to adopt written sexual harassment policies and provide yearly sexual harassment training. The State developed a Sexual Harassment Model Policy and model harassment training materials that employers can use, or employers can develop their own policy and training materials so long as they meet the State’s minimum standards for compliance.

In April 2023 the New York Department of Labor updated its Sexual Harassment Model Policy (the “Model Policy”), model harassment complaint form, and model training materials, which can be found here. The updated Model Policy

New Jersey Court Rules That the “ABC” Test Does Not Apply to Fully-Commissioned Real Estate Salespeople

Published on: August 1, 2023 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

In a recent published decision, Kennedy v. Weichert, the New Jersey Appellate Division addressed the proper classification of fully commissioned real estate salespeople as employees versus independent contractors. The court ruled that these individuals are not subject to the “ABC” test for purposes of determining their classification under the New Jersey Wage Payment Law (“WPL”).

The “ABC” Test:

Under the “ABC” test, workers are presumed to be employees unless the business can show that: (1) it neither exercised control over the worker nor had the ability to exercise control in terms of the completion of the work; (2) the services provided were either outside the usual course of business or performed outside of all the places of business of the enterprise; and (3) the individual is customarily engaged in an independently-established trade, occupation, profession or business. A business’s failure to satisfy any one of the three criteria results in the worker being classified as an “employee” for wage payment and wage and hour purposes.

SCOTUS Imposes More Stringent Standard For Employers Managing Requests for Religious Workplace Accommodations

Published on: July 7, 2023 | by Joshua L. Weiner

On June 29, 2023, a unanimous U.S. Supreme Court issued its decision in Groff v. DeJoy, clarifying employers’ obligations to accommodate employees’ religious practices under Title VII of the Civil Rights Act. The Court reinterpreted the meaning of “undue hardship” and held that Title VII requires an employer who denies an employee’s request for a religious accommodation to show that the burden of granting an accommodation would result in “substantial increased costs in relation to the conduct of its particular business.” In doing so, the Court rejected a commonly applied, employer-friendly interpretation that an undue hardship exists if an employer can show that the accommodation would result in “more than a de minimis cost.”

The More Lenient “Undue Hardship” Standard Applied by the Lower Courts:

Under Title VII, employers are required to accommodate an employee’s religious practices unless doing so would impose an “undue hardship on the conduct of the employer’s business.” In Groff, a postal carrier who was unwilling to work on Sundays because of his religious practices sued his employer (the United States Postal Service), alleging that it could have accommodated his Sunday Sabbath without undue hardship. Initially, Groff’s position did not include Sunday work. This later changed, however, causing Gross to transfer to a small postal station that did not make Sunday deliveries. Once this station began making Sunday deliveries, however, Groff’s Sunday deliveries were redistributed to other workers. He was disciplined for failing to work on Sundays, and he eventually resigned. The trial court granted the employer summary judgment, which the Third Circuit Court of Appeals affirmed, finding that exempting Gross from Sunday work resulted in more than a de minimis cost, as the exemption had “imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale.”

New York Joins the Non-Compete Ban Wagon

Published on: June 29, 2023 | by Kathleen M. Connelly

Following through on Governor Hokhul’s promise in her 2022 State of the State address, New York lawmakers passed a blanket ban on all non-compete agreements, thus joining the growing federal and state efforts to curb their use. However, the bill imposes greater restrictions than those implemented in other jurisdictions, including California, North Dakota, Oklahoma, Colorado, Illinois and Maryland. The bill will take effect 30 days after it is signed by the Governor.

The Broad Scope of the Ban:

The bill prohibits all employers, regardless of industry, from seeking, requiring, demanding or accepting a non-compete agreement from any “covered individual,” defined as any person who performs services on such terms that the individual is economically dependent on the other. Thus, unlike other laws that include a carve out for highly compensated employees, the ban extends to all workers across the board, including workers hired as independent contractors.