May 3, 2018 – Edison, New Jersey – Today, New Jersey Governor Phil Murphy joined the Northeast Regional Council of Carpenters (NRCC) for the signing of an Executive Order that will establish a Task Force on Employee Misclassification. The Executive Order signing was held at the new, state-of-the-art NRCC Apprentice Training Center at 75 Fieldcrest Avenue in Edison.
The Task Force on Employee Misclassification will be made up of at least 12 members, including three representatives from the New Jersey Department of Labor and Workforce Development, three representatives from Department of the Treasury as well as one representative each from the Department of Law and Public Safety, the Department of Agriculture, the Department of Banking and Insurance, the Department of Human Services, the Department of Transportation and the Economic Development Authority.
According to the Governor’s press release:
“The Task Force will be charged with a number of responsibilities to combat employee misclassification, including: examining and evaluating existing misclassification enforcement by executive departments and agencies; developing best practices by departments and agencies to increase coordination of information and efficient enforcement; developing recommendations to foster compliance with the law, including educating employers, workers and the public about misclassification; and conducting a review of existing law and applicable procedures related to misclassification.”
“We applaud Governor Murphy for signing this executive order today as our organization has advocated for years for employee misclassification reform in the construction industry,” said Northeast Regional Council of Carpenters Executive Secretary-Treasurer John Ballantyne. “Classifying construction workers as independent contractors exploits workers and pushes them further into the shadows, hurts honest and law-abiding businesses and cheats the U.S. taxpayer, as the employer avoids paying any Social Security or Medicare, workers compensation, unemployment insurance or overtime.”
In June 2016, Stockton University released The Underground Construction Economy in New Jersey. The study concluded that some construction companies in New Jersey are misclassifying construction workers, paying them cash “under the table” and not paying Social Security, Medicare, unemployment insurance or workers compensation. These companies are also not paying worker benefits and cheating the Federal and State government out of millions of dollars in tax revenue per year.
Stockton found that New Jersey’s underground construction economy is estimated to range between $528 million and $1.2 billion and involves 35,000 construction workers who operate off-the-books or as misclassified independent contractors. Stockton believes that between $284 million and $528 million are paid each year in underground wages. Lost state income taxes not being paid to the state are estimated to be nearly $11 million in off-the-books employment and nearly $9 million from employment of misclassified workers. An estimated $3.1 million to $6.7 million in unemployment insurance also goes unpaid by unscrupulous construction contractors.
For more information about the Stockton University study, employee misclassification and payroll tax fraud, please visit our website: http://www.northeastcarpenters.org/tax_fraud
The Northeast Regional Council of Carpenters (NRCC) represents nearly 40,000 hardworking men and women in Delaware and New Jersey and portions of Maryland, New York, and Pennsylvania. NRCC is one of the largest trade unions on the East Coast. The NRCC equips professional men and women carpenters with the skills, training and quality workmanship that are demanded in today's construction industry. For more information on NRCC, please visit our website: northeastcarpenters.org & like us on social Facebook: facebook.com/NortheastRegionalCouncilofCarpenters; Twitter: @nrccarpenters; Instagram: @northeastcarpenters; LinkedIn: linkedin.com/company/northeastcarpenters; and Snapchat: @nrccarpenters