The Federal Fair Labor Standards Act requires that employers, including New Jersey employers, pay their non-exempt employees minimum wage and overtime (the vast majority of employees are not subject to an exemptions; the major exemptions are for executive, administrative and professional employees, and outside sales). Independent contractors, however, are not protected by the Fair Labor Standards Act. Claims of misclassification of employees have recently led to significant amounts of litigation.
The United States Third Circuit Court of Appeals recently issued an opinion on misclassification of workers in the case of Priya Verma v. 3001 Castor, Inc., which found that adult dancers were employees entitled to the protection of the Federal Fair Labor Standards Act. While the case arose in Pennsylvania Federal Court, the Third Circuit rules on appeals from federal courts in New Jersey, Pennsylvania, Delaware and the United States Virgin Islands, so it’s decisions determine how federal law, including the Fair Labor Standards Act, will be applied are binding in New Jersey.