From JDSupra, Joseph C. O’Keefe, Esther Pak, Catherine Pontoriero share their view on employment trends in 2015 in New Jersey. With respect to independent contractors, they write:
State Court – Independent Contractors
In Hargrove v. Sleepy’s LLC, 220 N.J. 289 (2015), the New Jersey Supreme Court addressed the question—submitted by the Third Circuit Court of Appeals—of “which test a court should apply under New Jersey law to determine an employee’s status” for purposes of New Jersey’s Wage Payment Law (WPL) and Wage and Hour Law (WHL). Based on its conclusion that the same test should determine an employee’s status under the WPL and WHL, the Court held that “the ‘ABC’ test derived from the New Jersey Unemployment Compensation Act . . . governs whether a plaintiff is an employee or independent contractor for purposes of resolving a wage-payment or wage-and-hour claim.” In order to be considered an independent contractor under that standard, an individual must: (1) be free from direction and control in connection with the performance of the service; (2) perform services either outside the usual course of business of the employer or outside all the employer’s places of business; and (3) be customarily engaged in an independently established trade, occupation, profession or business of the same nature as the service performed. In light of the New Jersey Supreme Court’s decision, the Third Circuit Court of Appeals reopened the matter in May 2015 and instructed the district court to apply the “ABC” test in determining the status of Sleepy’s delivery workers under New Jersey’s WPL and WHL.
In May 2015, the United States District Court, District of New Jersey, addressed and decided an issue of first impression regarding nonpayment of overtime work under WHL. In Thompson v. Real Estate Mortgage Network Inc., No. 2:11-1494, 2015 WL 2453726 (D. N.J. May 22, 2015), the District Court denied the mortgage company’s motion to dismiss an underwriter’s WHL claim, in which she alleged that she was denied overtime pay after working in excess of forty hours per week. The court rejected Real Estate Mortgage Network Inc.’s argument that the provision in the WHL that allows employees to recover from their employers for failing to pay “the minimum fair wage” only allows employees to recover for being denied minimum wage, not overtime pay. According to the District Court, WHL gives employees the express right to recover unpaid overtime pay.
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Source: 2015 Year in Review—the Top 10 Trends in New Jersey Employment Law