In New Jersey, independent contractors are not covered by workers compensation. So, of course, many employers try to classify workers as independent contractors, even when they’re not.
You might find yourself being treated like an employee right up until the moment you get hurt.
Fortunately, New Jersey courts are on to this behavior, and they aren’t tolerating it.
The East Bay Drywall Case
Recently, the New Jersey Supreme Court ruled in East Bay Drywall, LLC v. Department of Labor and Workforce Development.
In this case, workers employed by East Bay Drywall did meet some of the criteria laid out under the “ABC Test” which determines whether an individual is an employee or an independent contractor. East Bay would contact workers to see if they were available for certain jobs, and they were free to accept or decline the offer. Some workers even left the jobs mid-installation if they found a better job, and some worked for other area businesses. East Bay would provide the workers with the raw materials necessary to complete installations, and the workers provided tools and transportation. East Bay did not direct the workers in how to finish the drywall, but remained responsible for the finished product.
As a result, East Bay stopped making their reports to the Department of Labor and Workforce Development. They also stopped contributing to the unemployment compensation and temporary disability fund. The DoJ sent out an auditor. The auditor determined that four of the individuals working for the company should have been classified as employees.
The court found that the workers did not meet all three prongs of the ABC test, and thus should be classified as employees. They in fact found that all 16 of the workers employed by East Bay should be classified as employees.
This was not a workers compensation case, of course, but it is a case that could impact workers compensation cases in the future. It demonstrates that all three prongs of the test must be met in order for employers to classify someone as an independent contractor. While the ABC Test has always been in use, in the past employers might have been able to make an argument that a given worker met most of the criteria and should be considered an independent contractor.
What is the ABC Test?
The ABC test establishes three prongs for determining whether a person is an employee or an independent contractor.
- Whether the individual is under the direction and control of an employer.
- Whether the work is outside the usual course of business for which service was performed.
- Whether the individual is customarily engaged in an independently established trade, occupational, profession, or business.
For the most part, you are presumed to be an employee unless an employer can prove otherwise by establishing your status under all three prongs of the test.
If you get hurt on the job, report it to your employer and file a claim unless you yourself would make the claim that you have an established business of your own that would continue to exist and thrive if your employer terminated you tomorrow. If the employer pushes back, consider contacting us. We can tell you if you should be classified as an employee, and we can help you pursue your workers compensation claim.