Labor and Employment

Published on: March 17, 2014

Independent Contractor or Employee: How Do I Properly Classify My Workers?

One of the most common areas in which business owners make a mistake is with the hiring and properly classifying new workers. Classifying a person as an independent contractor can have appealing benefits for an employer, but it can have detrimental tax consequences and other legal implications under both federal and New Jersey law.

For example, employers maybe tempted to classify workers as independent contractors because they would then not have to pay the employer portion of social security and Medicare taxes for their workers. Employers will also not be required to comply with the Fair Labor Standard Acts and New Jersey Wage and Hour Law, both of which provide for minimum wage and overtime pay requirements. Instead, a worker who is an independent contractor will be considered “self-employed,” and will be required to pay the taxes as well as their full social security and medicare income tax. This has the effect of transferring seven percent of the cost of worker from the employer to the worker.

Before determining if a worker is an independent contractor or an employee, it is essential to seek advice from an experienced New Jersey employment attorney. Proper classification of a worker must be made on a case-by-case basis. Factors have been set forth by the United States Appellate Court for the Third Circuit and the New Jersey Supreme Court, which must be reviewed in making the determination.

The New Jersey Supreme Court explained that there are at least twelve factors that should be considered in determining if a worker is an employee. First, and most important, a worker is more likely to be considered an employee if the employer controls the means and manner her performance. Second, a worker can be considered an employee if her occupation is one that an employer can be required to supervise. Third, a worker who has the skill set that matches what the employer normally seeks of its employees to perform a job can be considered an employee. Fourth, a worker who is provided with equipment and a workplace by the employer is more likely to be considered an employee. Fifth, a person who continuously provides service to an employer can be construed as an employee. Sixth, workers who are paid directly by the employer can be construed as an employee. Seventh, a person who is actually terminated by the employer is more likely to be construed as an employee. Eighth, a worker who is provided annual leave is probably an employee. Ninth, a worker who is an integral part of the business of the employer is more likely to be construed as an employee. Tenth, a person who accrues retirement benefits will normally be considered as an employee. Eleventh, if a worker’s social security tax is paid by the employer then, she will probably be construed as an employee. Finally, the intention of the parties can help establish if a relationship is that of an employee-employer.
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Published on: March 10, 2014

Can I Sue My Employer If I Quit My Job?

by Boris Peyner

New Jersey employment law provides some of the strongest protections in the nation for New Jersey employees. A typical employment lawsuit involves an employee who has been fired in violation of some type of legal right. Employers, however, are now more sophisticated and do not always terminate their employees. Instead, employers now try to “force” their employees to quit by creating a hostile work environment.

Thus, a common question I am often asked is: “Can I still sue my employer who violated my rights if I quit?’ The answer will typically depend on a case-by-case analysis and the particular reasons behind the resignation. However, courts have now recognized a principal known as “constructive discharge.” Constructive discharge occurs when an employer make an employee’s job so miserable that the employee is forced to quit. Constructive discharge cases are often very difficult because the burden is on the employee to show that the work conditions were so unpleasant or difficult that a reasonable person would have felt compelled to quit, and the employer created them a hostile work environment for a prohibited reason, such as discrimination or retaliation against a “whistle blower.”

The New Jersey Supreme Court has explained that to sustain a claim for constructive discharge an employee must prove that the conduct complained of was so egregious that any reasonable person would be forced to resign rather than continue to endure it. For example, a typical case of constructive discharge can be sexual harassment by a supervisor. Another common example is when an employee makes a reasonable complaint that the employee believes another employee, typically one in a supervisor position, is violating the law. As a result, the employee that made the complaint begins to get unfavorable work assignments, is given poor reviews, and is otherwise subjected to a hostile work environment. If the employee quits as a result of the hostile work environment that employee could potentially sustain a claim for constructive discharge.

Employees who quit should not get discouraged by the fact that constructive discharge cases are difficult. In fact, New Jersey courts are quick to point out that decisions in constructive discharge cases are heavily fact-driven. It is therefore recommended to seek guidance from an experienced New Jersey employment attorney.
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Published on: March 7, 2014

Pregnancy Now Protected Under the New Jersey Law Against Discrimination

by Maurice W. McLaughlin

On January 21, 2014, Governor Chris Christie signed legislation amending the New Jersey Law Against Discrimination to include pregnancy, childbirth, and related medical conditions among employees receiving protection against discrimination. The law is effective immediately.

Introduced as bill in September 2013 to combat discrimination against pregnant women and women with medical needs after childbirth, the Act requires employers to make reasonable accommodations to pregnant women and those recovering from childbirth. Accommodations can include restroom breaks, breaks for increased water intake, periodic rest, help with manual labor, job restructuring or modified work schedules, and temporary transfers to less strenuous or less hazardous work. The bill referred to reports that women who requested an accommodation in the workplace to help them maintain a healthy pregnancy or who needed a reasonable accommodation as they recovered from childbirth were being removed from their positions, placed on unpaid leave, or fired.

In urging the New Jersey Senate to pass the bill, the American Civil Liberties Union of New Jersey (ACLU)identified some examples of women who were denied reasonable accommodations because of their pregnancy. Before the amendment of the New Jersey Law Against Discrimination, those employer actions were legal. Examples include a pregnant security worker who was denied a stool to sit on at her job, a pregnant cashier who was not allowed to keep a water bottle at her workstation and collapsed at her register, and a pregnant line cook who was denied additional restroom breaks.

The ACLU Public Policy Director also cited a New Jersey Supreme Court case that held that it was legal for a casino to fire a pregnant worker whose doctor instructed her not to return to work after discovering a serious problem with one of the twins that she was carrying. Said the Director, “What does it say about our state’s values that our laws ask a woman to make the choice between doing what’s needed to protect her pregnancy, and keeping her job?”

Employers are not to apply workplace accommodations “in a manner less favorable than accommodations or leave provided to other employees not affected by pregnancy but similar in their ability or inability to work.” Further, the Act does not intend to impact the amount of employees’ rights to paid or unpaid leave under the law.
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Published on: February 14, 2014

Individual Liability Under the Fair Labor Standards Act

by Pauline M.K. Young

The Fair Labor Standards Act (“FLSA”) is a federal law that governs employment in all private employers and most government employers in all fifty states. In New Jersey, this federal law works in conjunction with the New Jersey Wage and Hour Law. These laws set forth requirements for minimum wages, overtime, pay, maintenance of employee records, and other work-related issues.

In New Jersey, the minimum wage in 2013 was set at $7.25 per hour (the federal minimum for wages). In 2014 that minimum wage in New Jersey will be increased to $8.25 per hour. Therefore, the minimum overtime payment for 2013 is $10.88 per hour and for 2014, it will be $12.38 per hour for hours worked in excess of forty hours per week.

If an employer violates the FLSA, the injured employee may bring an action against the employer for unpaid wages, and may also recover her attorneys fees and legal costs associated with bringing the action. If a court finds that the violation was willful, the employer may have to pay the employee double the wages that the employer wrongfully withheld.
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Published on: January 22, 2014

The Relationship Between A Bonus and Overtime Under The Fair Labor Standards Act

by Boris Peyner

The Fair Labor Standards Act of 1938 (“FLSA”) is a federal statute that was introduced to regulate certain employment practices. For example, the FLSA establishes a national minimum wage, guarantees pay at a rate of one and one-half times the employee’s regular rate of pay for certain jobs, and prohibits most employment of minors in oppressive child labor positions.

The FLSA also imposes various requirements on employers. It is important for employers to be aware of the requirements imposed on them by the FLSA. For example, many employers will pay their employees bonuses to reward them for their time and commitment during the year. The problem for employers is that a year-end non-discretionary bonus may be included in employees’ regular rate of pay when calculating overtime.

Generally, the FLSA requires that employers calculate employees’ regular rate of pay by including all compensation paid to employees during the workweek. Employers must then calculate overtime based on employees’ regular rate of pay. Sometimes bonuses are required to be included when calculating employees’ regular rate of pay, however, is an exception and not used for calculating overtime. If bonuses are included in employees’ regular rate of pay then employers must pay more overtime, and then more payroll tax as well.

There are exceptions that permit the payment of discretionary bonus which is not required to be included in employees’ regular rate of pay, however, is an exception and not used for calculating overtime. For a bonus to be excluded from the calculation of employees’ regular rate of pay it must be discretionary. For a bonus to be discretionary the payment must be solely within employers’ discretion. This means that the payment cannot be mandated by a contract, agreement, or based on an implied promise. Employers must have complete discretion to decide whether to pay the bonus, and how much to pay if they chose to do so.
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Published on: November 26, 2013

Residency Requirements for New Jersey State Employees

by Pauline M.K. Young

The New Jersey First Act makes it mandatory for many public officers and employees to live in New Jersey. The law, which went into effect September 1, 2011, requires all New Jersey state and local government employees to reside in New Jersey unless otherwise exempted. This includes, for example, employees of public agencies, commissions, public institutions of higher education, and school boards.

Employees who were already employed as of September 1, 2011 are grandfathered in, meaning they are not required to meet the residency requirement and are not required to move to New Jersey if they were not required to under prior law. However, those who begin working after September 1, 2011 must reside in New Jersey. If they do not, they have one year following the start of their employment to relocate to New Jersey. If the new employee does not move within a one year period, she may be removed from her position. The September 1, 2011 cutoff date is determined based upon when the employee actually started working, not when she received an offer of employment.

If there is a break in employment of more than seven days, an employee previously grandfathered in, may lose that status and become subject to the residency requirement. A “break in public service,” while not set forth in the language of the law, is defined by the New Jersey Civil Service Commission as “an actual separation from employment for more than seven calendar days due to such causes as resignation, retirement, layoff, or disciplinary removal.” Generally, a resignation for the purposes of a new public appointment in the same governmental jurisdiction is not considered a break in public service.
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Published on: November 18, 2013

New Jersey’s Strides Towards Equal Pay for Women

by Pauline M.K. Young

The Unites States Census Bureau has consistently found that women are paid less than men every year. Indeed, the National Women’s Law Center found that in New Jersey in 2012, a woman made approximately 79 cents for every dollar a man made. These discrepancies do not just account for females in different careers from males, but that this pay differential is also present for females in the same or similar fields as their male counterparts.

While New Jersey does not have as wide a gap between men and women as some other states, the pay gap is still clear and ongoing. While discrimination against women has constituted a violation of New Jersey’s Law Against Discrimination for decades, it is often difficult to prove. For instance, an employer can simply say that its female employee was being paid less than a similarly situated male employee because the male employee had better qualifications or performed better. It would be rare for an employer to have two employees, one male and one female, who had the same education, the same grades, attended the same schools, had the same level of experience and measures of success, and performed or produced exactly the same. Therefore, it is difficult to prove that any pay discrepancy is due to gender and not some other valid reason.

However, even more basic than that, the employee would have to be able to find out in the first place that she was in fact being paid less than what she would be paid if she were male. Indeed, many employers have a strict policy of forbidding employees from discussing their salaries, wages, or other benefits. While employers have a right to make the determination about what they will pay their employees, employers cannot take something such as gender into account when making that determination, just as employers cannot alter their payments as a result of race or religious beliefs.
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Published on: November 12, 2013

New Jersey’s Social Media Law

by Pauline M.K. Young

It has become common to hear news stories about employees who posted something on their personal Facebook, or other social media sites, and then got fired as a result of that post. Indeed, employers have, more and more, started to use social media sites as a way of monitoring their employees, even to the point of requiring passwords or access to otherwise “private” websites or submissions.

However, beginning on December 1, 2013, New Jersey will follow the growing trend in other states in enacting legislation which will bar New Jersey employers from asking employees or potential employees for access to their personal social media accounts. This comports with the recent New Jersey law enacted in 2012 which bans colleges from requiring applicants to provide social media account passwords.

This new law specifically prohibits employers from requesting or requiring employees’ usernames, passwords, or other access to personal accounts on websites such as Twitter and Facebook. Further, employees cannot even waive this right. Any waiver of this right is deemed void.
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Published on: November 8, 2013

Suing the Government or Its Employees in New Jersey

by Boris Peyner

Historically and as a matter of public policy, public entities are immune from suit pursuant to the doctrine of “sovereign immunity.” The New Jersey Tort Claims Act, however, creates limited exceptions to sovereign immunity. People are therefore permitted to sue for injuries but must comply with the strict requirements of the Tort Claim Act.

New Jersey’s Tort Claims Act requires that persons who have claims against a governmental entity or its employee notify the public entity within ninety days from the date the claim accrues. The notice must contain the name and address of the claimant, the date, place and circumstances of the occurrence, a general description of the injury, the damage or loss sustained, and the name of the public entity or the employees responsible. Each municipality may have its own tort claim notice form. Failure to provide notice is an absolute bar to later recovery against a governmental unit or its employees. It is therefore critical to ensure compliance with the notice provisions of the Tort Claim Act.

After notice of tort claim is submitted, the government is then permitted a six month review the claim before a lawsuit can be filed. A lawsuit can be filed upon the expiration of the six month period. However, not every injury gives rise to a cause of action that requires providing the municipality with notice and then waiting six months. For example, the Tort Claims Act does not apply to statutory claims such as those brought under New Jersey’s Conscientious Employee Protection Act and New Jersey’s Law Against Discrimination. However, because the Tort Claims Act will bar a covered but late claim, it is better to comply now than find out later you were wrong.

Published on: November 6, 2013

Revocation and Suspension of Teachers’ Certifications

by Pauline M.K. Young

Because of the high level of public concern over New Jersey’s children, teaching is a highly regulated and scrutinized industry. Not only are teachers required to meet significantly high standards of education and training, and, in most cases, to have specialized knowledge in their field, but they must also maintain a level of behavior and continued education to maintain their teaching certificates.

If a school board terminates a teacher, or otherwise refuses to renew a teacher’s contract, that school board is required, in some circumstances, to alert the New Jersey State Board of Examiners of discontinuation of employment. For instance, a school district is required to report a discontinuation of a teacher’s employment – even if that is due to the teacher’s resignation or retirement – if the teacher is accused of a criminal offense or “unbecoming conduct.”

The Board of Examiners is the state licensing agency which reviews and monitors teachers. IT has the power to bestow, deny, suspend, or revoke a teacher’s license. The Board of Examiners may revoke or suspend a teacher’s certificate if the teacher demonstrates inefficiency, incapacity, conduct unbecoming a teacher or for any other just cause – such as being convicted of a crime. However, the Board of Examiners cannot revoke or suspend a New Jersey teacher’s certificate unless it gives the teacher notice and the opportunity to be heard.
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