Ever since “gig economy” companies like Uber and Postmates began to gain popularity, courts around the country have struggled to balance existing worker protection laws with these new roles. For the most part, Uber and similar companies have broad leeway to define their gig workers as independent contractors, as gig workers operate on their own time and with minimal supervision from the company.
However, some New Jersey lawmakers are trying to change that with a new bill, which could result in increased protections for gig economy workers if it becomes law. Of course, local businesses and tech giants like Uber are fiercely contesting this legislation, arguing that there could be long-term economic consequences if their gig workers are re-classified as employees.
Understanding Senate Bill 4204
Senate President Stephen Sweeney recently introduced Senate Bill 4204 before the New Jersey legislature. If passed, this bill would expand the state’s definition of an “employee” to include individuals who do not conduct daily business on-site with the employer.
The primary goal of this bill is to cut down on the number of worker misclassifications across New Jersey, which have continued to rise every year. In fact, the New Jersey Department of Labor (DOL) found that over 12,315 New Jersey gig workers were misclassified as independent contractors in 2018, after auditing only 1% of the state’s employers.
In recent months, the state DOL has also specifically questioned whether Uber drivers can legally be classified as independent contractors. The agency is currently seeking $650 million from Uber, aiming to recover taxes on disability and unemployment insurance payments for misclassified employees.
The Impact of Re-Classifying Gig Workers
Worker misclassification does have serious consequences for workers, which is why many labor groups and unions have supported Senate Bill 4204. Because employers are not required to provide independent contractors with the same benefits as regular employees, gig workers may have a difficult time paying for critical necessities such as health care and disability insurance, especially after an accident on-the-job. Additionally, employers do not have to pay independent contractors at minimum wage or abide by federal overtime regulations.
However, critics say that Senate Bill 4204 will have too many detrimental effects on the New Jersey economy, because the current gig model relies on independent contractors in order to stay profitable. This is especially true for small local businesses – or even national services like AAA, which depend on a network of loosely-connected independent contractors to provide fast emergency roadside services.
Helping You Explore All Your Options
Although the outcome of Senate Bill 4204 is still unclear, one thing is certain: The laws surrounding gig workers will continue to evolve at both the national and state levels, as our legal system adapts to the new gig economy business model. At Levinson Axelrod, our workers’ compensation lawyers work hard to stay abreast of these issues, so that we can explore the full range of legal options for our clients.
If you’ve been the victim of employee misclassification, you may not be able to recover traditional benefits like workers’ compensation in the event of an on-the-job injury. Whether you need to file for workers’ compensation or pursue a personal injury lawsuit, we’ll stand by your side and apply more than 80 years of experience to your case.
Call (732) 440-3089 today to schedule a free case consultation with our legal team in New Jersey.