Using enhanced powers provided by legislation signed by Governor Phil Murphy in 2020 and 2021 the New Jersey Attorney General’s Office recently filed a complaint (the “Complaint”) in the New Jerey Superior Court of Essex County on behalf the of the Commissioner of the New Jersey Department of Labor and Workforce Development (the “Commissioner”) alleging two trucking companies named STG Logistics, Inc. (STGL) and STG Drayage LLC (“STGD”) violated New Jersey wage and hour laws by knowingly misclassifying hundreds of drivers (“Drivers”) as independent contractors when they should have been classified as employees. Through this lawsuit the Commissioner seeks to immediately enjoin STGL and STGD from engaging in alleged ongoing unlawful misclassification of Drivers and seeks as well to impose statutorily authorized fines and penalties, recover reasonable costs of enforcement, including attorney’s fees, and obtain wages that have been improperly withheld from the Drivers.
According to the Report of Gov. Murphy’s Task Force on Employee Misclassification published in July 2019 (“the Report”), misclassification is the practice of illegally classifying workers as independent contractors rather than employees for the purpose of reducing labor costs. The Report explains that:
“[M]isclassification deprives workers of a suite of rights guaranteed to employees, but not independent contractors, including the right to earn overtime for working in excess of 40 hours per week; to receive workers’ compensation benefits if injured on the job; to receive unemployment benefits; to receive earned sick leave; to take job-protected family leave and receive family leave benefits; to receive health and safety protections, as well as protection under state and federal antidiscrimination laws; and to organize under the National Labor Relations Act.”
Misclassification also deprives the State of New Jersey of millions of dollars in lost tax revenue. Id.
The Commissioner’s Complaint alleges that STGL and STGD engaged in a misclassification scheme “to disguise the significant control they exerted over Drivers”. Complaint ¶3. This scheme took the form of requiring that “Drivers purchase and maintain their trucks in the Drivers’ names; requiring that Defendants’ companies’ names appear on the trucks; requiring that Drivers lease their trucks to the companies for their exclusive possession, control, and use; prohibiting Drivers from using the trucks for other work without the companies’ written consent; and exclusively controlling assignment of routes and rates of pay for all Drivers.” Id.
The Complaint further alleges that the misclassification scheme committed by STGL and STGD serve to violate a host of state labor laws by:
a) Unlawfully deducting millions of dollars from the Drivers’ pay, instead of paying those monies to the Drivers, in violation of New Jersey’s Wage Payment Law (“WPL”), N.J.S.A. 34:11-4.4 and N.J.S.A. 34:11-4.2.
b) Failing to pay the Drivers the minimum wage, in violation of New Jersey’s Wage and Hour Law (“WHL”), N.J.S.A. 34:11-56a4, including at times paying the Drivers nothing for a week’s work or even resulting in negative balances for the Drivers.
c) Failing to maintain records of hours worked and wages paid to the Drivers, and failing to produce the same to the Department of Labor and Workforce Development’s Division of Wage & Hour Compliance, in violation of the WHL, N.J.S.A. 34:11-56a20.
d) Failing to make sick time available to the Drivers in violation of New Jersey’s Earned Sick Leave Law (“ESLL”), N.J.S.A. 34:11D-5.
e) Failing to provide all Drivers with workers’ compensation coverage, leaving them without access to medical treatment and temporary and permanent benefits if they were injured on the job, in violation of New Jersey’s Workers’ Compensation Law (“WCL”), N.J.S.A. 34:15-71.
f) Failing to make required contributions to the Unemployment Compensation Fund and State Disability Benefits Fund, in violation of New Jersey’s Unemployment Compensation Law (“UCL”), N.J.S.A. 43:21-7, leaving the Drivers at risk of being found ineligible for unemployment, disability, and family leave insurance and depriving the State funds of millions of dollars.
g) Failing to make required contributions to the Workforce Development Partnership Fund and Supplemental Workforce Fund for Basic Skills, in violation of the Employment and Workforce Development Act (“EWDA”), N.J.S.A. 34:15D-1 to – 34, thus depriving their employees of the ability to benefit from training and other workforce development programs.
In a press release issued soon after the filing of the Complaint, the Commissioner is quoted as saying that, “Companies illegally profiting through corrosive business models at the expense of hardworking employees 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.”
As of this writing, STGL and STGD have not responded to the Commissioner’s Complaint.
The attorneys at Mashel Law LLC have successfully handled class action claims brought by workers unlawfully misclassified by their employers. If you believe your employer has misclassified you or has otherwise violated the federal Fair Labor Standards Act or New Jersey wage and hours laws, do not hesitate to call the attorneys at Mashel Law (732) 536-6161 or fill out the contact form on this page for immediate help. At Mashel Law, LLC, located in Marlboro, New Jersey, we are dedicated to protecting the rights of employees.