Proposed Bill A3310, introduced in the New Jersey State Assembly by Assemblyman Timothy J. Eustace and Assemblywoman Connie Wagner, attempts to supplement chapter 11 of Title 34 of the Revised Statutes by regulating the payments by businesses to Independent Contractors passed in the New Jersey State Assembly on June 24, 2013. An identical bill, S2496 introduced by State Senator Fred H. Madden Jr., is being considered in the New Jersey State Senate. The bill is applicable to any independent contractor hired or retained by a business for an amount equal or greater than $600.00 and if the Assembly bill is enacted would take effect immediately.

If the bill passed by the New Jersey State Assembly passes the New Jersey State Senate and is enacted into law, it would mean that an independent contractor hired by a business shall be paid in accordance with the agreed upon work terms between the two parties. The bill also stipulates that if there is no agreement between the two parties as to when payment should be rendered then the independent contractor is to be paid “not later than the last day of the month following the month in which the compensation is earned.” (Assembly, No. 3310, 30-31 (2013))

If there is an agreement, it must be signed by the independent contractor and the business employing the independent contractor must keep the agreement on file for not less than six (6) years, which is the amount of time an independent contractor would have to file a complaint with the Commissioner of Labor and Workforce Development (“Commissioner”). Furthermore, the business must be able to produce the signed agreement to the Commissioner upon request. The agreement needs to include a description of how the independent contractor’s payment is earned and calculated. If the Commissioner requests to see an agreement and the business cannot produce the agreement, there is a presumption that the terms the independent contractor claims exists are the agreed terms.

The bill also empowers the Commissioner to bring any legal action necessary for the independent contractor to collect monies owed and requires that the business pay for both the court costs and reasonable attorney fees the court deems are owed. The Commissioner may also request liquidated damages unless the business can prove that it had a good faith basis for the payment the business made to the independent contractor. Liquidated damages would be capped at 100% of the total compensation found to be due and owing to the independent contractor.

The attorneys at The Jayson Law Group LLC can work with businesses to draft contract agreements with their independent contractors to comply with this proposed law. Our firm serves Irvington, New Jersey and many of the towns and cities throughout Essex and Union Counties.