Bill Text: NJ S1048 | 2018-2019 | Regular Session | Amended
Bill Title: Concerns payment of independent contractors.*
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-13 - Substituted by A1526 (3R) [S1048 Detail]
Download: New_Jersey-2018-S1048-Amended.html
Sponsored by:
Senator JOSEPH F. VITALE
District 19 (Middlesex)
SYNOPSIS
Concerns payment of independent contractors.
CURRENT VERSION OF TEXT
As amended by the Senate on June 27, 2019.
An Act concerning the payment of 1[freelance workers] independent contractors1 and supplementing chapter 11 of Title 34 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Client" means a sole proprietorship, partnership, corporation, limited liability company, association or other business entity or a nonprofit organization contracting with 1[a freelance worker] an independent contractor1 in any occupation, industry, trade, business or service for 1[compensation] remuneration1 equal to or greater than $600. The term "client" does not include a person or any governmental entity, or a general acute care facility licensed by the Commissioner of Health and Senior Services pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.), including rehabilitation, psychiatric, and long-term acute facilities.
"Commissioner" means the Commissioner of Labor and Workforce Development.
1["Compensation" means the earnings of a freelance worker. The term "compensation" includes reimbursement for expenses.
"Freelance worker" means a sole proprietor who is not an employee and who is hired or retained as a freelance worker by a client to provide services in exchange for compensation in an amount equal to or greater than $600. "Freelance worker" shall not mean:
a. any person who is a licensed medical professional;
b. any person engaged in the practice of law pursuant to the contract at issue and who is a member in good standing of the bar of the highest court of any state, possession, territory, commonwealth, or the District of Columbia and who is not under any order of any court suspending, enjoining, restraining, disbarring or otherwise restricting the person in the practice of law;
c. any person who is licensed by the New Jersey Real Estate Commission pursuant to R.S.45:15-1 et seq.;
d. any person who contracts to solicit orders in New Jersey as the sales representative of a principal; or
e. any person subject to a collective bargaining agreement that specifies wages, terms and conditions of employment.
"Principal" means a person or company engaged in the business of manufacturing, who:
a. manufactures, produces, imports, or distributes a product for wholesale;
b. contracts with a sales representative to solicit orders for the product; and
c. compensates the sales representative in whole or in part by commission.]
"Independent Contractor" means an individual who has performed services for remuneration, where:
a. The individual has been and will continue to be free from control or direction over the performance of the service, both under the individual's contract of service and in fact; anh
b. The service is either outside the usual course of the business for which that service is performed, or that the service is performed outside of all the places of business of the enterprise for which that service is performed; and
c. The individual is customarily engaged in an independently established trade, occupation, profession or business.
"Remuneration" means all compensation for personal services, including commissions and bonuses and the cash value of all compensation in any medium other than cash.1
2. a. 1[A freelance worker] An independent contractor1 shall be paid the 1[compensation] remuneration1 earned in accordance with agreed work terms. The contract between the 1[freelance worker] independent contractor1 and client shall be reduced to writing, and signed by the client and the 1[freelance worker] independent contractor1. Signed copies of the contract shall be provided to the client and the 1[freelance worker] independent contractor1 and be kept on file by the client for a period of not less than six years, and made available by the client to the commissioner upon request. The written contract shall include the name and mailing address of both the client and the 1[freelance worker] independent contractor1, an itemization of all services to be provided by the 1[freelance worker] independent contractor, including clearly defined performance metrics to which the client intends to hold the independent contractor1, a description of how 1[compensation] remuneration1 that is earned and payable shall be calculated, and the date on which the client shall pay the contracted 1[compensation] remuneration1 or the mechanism by which that date will be calculated. 1[The failure of a client to provide the written work terms, upon request of the commissioner, shall give rise to a presumption that the terms that the freelance worker has presented are the agreed work terms.]1
b. The contracted 1[compensation] remuneration1 shall be paid to the 1[freelance worker] independent contractor1 either on or before the date the 1[compensation] remuneration1 is due under the contract, or if the contract does not specify the date or the mechanism by which the date will be determined, the 1[freelance worker] independent contractor1 shall be paid the 1[compensation] remuneration1 earned not later than 30 days after the completion of the 1[freelance worker's] independent contractor's1 services under the contract. Once the 1[freelance worker] independent contractor1 has commenced performance of the services under the contract, the client shall not require as a condition of timely payment that the 1[freelance worker] independent contractor1 accept less 1[compensation] remuneration1 than the amount of the contracted 1[compensation] remuneration1.
c. No client shall threaten, intimidate, discipline, harass, deny a work opportunity to or discriminate against 1[a freelance worker] an independent contractor1, or take any other action that penalizes 1[a freelance worker] an independent contractor1 for, or is reasonably likely to deter 1[a freelance worker] an independent contractor1 from, exercising or attempting to exercise any right provided under this act, or from obtaining a future work opportunity because the 1[freelance worker] independent contractor1 has done so.
3. Any 1[freelance worker] independent contractor1 may file with the commissioner a complaint regarding a violation of 1[any of]1 the provisions of 1subsections a. or b.1 section 2 of this act 1[for an investigation of the complaint and statement setting the appropriate remedy, if any]1. 1Such a complaint shall be filed as a claim for wages and investigated by the commissioner under article 3 of chapter 11 of Title 34 of the Revised Statutes (C.34:11-57 et seq.). Services performed for remuneration shall be deemed employment and shall be subject to P.L.1965, c.173 (C.34:11-4.1 et seq.) and P.L.1966, c.113 (C.34:11-56a et seq.), unless and until it is shown to the satisfaction of the commissioner by the client that:
a. The individual has been and will continue to be free from control or direction over the performance of the service, both under the individual's contract of service and in fact; and
b. The individual's service is either outside the usual course of the business for which that service is performed, or that the service is performed outside of all the places of business of the enterprise for which that service is performed; and
c. The individual is customarily engaged in an independently established trade, occupation, profession or business.
The determination by the commissioner as to the employment status of the worker as either an employee or an independent contractor shall not be governed by the written contract required under section 2 of this act. Rather, the determination by the commissioner as to the employment status of the worker as either an employee or an independent contractor shall be governed by the facts of the relationship between the employer or client and the worker. The written contract required under section 2 of this act may be a factor considered by the commissioner in making a determination regarding employment status, but shall not be dispositive.
The commissioner may award back remuneration to an independent contractor and, for second and subsequent violations of this act, the commissioner may assess against the client an additional amount as liquidated damages. Liquidated damages shall be calculated by the commissioner as no more than 100 percent of the total amount of the underlying contract.
The powers of the commissioner and procedural rights of claimants under article 3 of chapter 11 of Title 34 of the Revised Statutes (C.34:11-57 et seq.), shall apply to all claims filed under this act by independent contractors with the commissioner for remuneration as if the complaint for remuneration were a claim for wages.1
Failure of a client to keep adequate records shall not constitute a bar to the filing of a complaint by 1[a freelance worker] an independent contractor. The failure of a client to provide the written work terms, upon request of the commissioner, shall give rise to a presumption that the terms that the independent contractor has presented are the agreed work terms1.
1[4. The commissioner may bring any legal action necessary, including administrative action, on behalf of any freelance worker that alleges a violation of any of the provisions of section 2 of this act. In addition to any remedies provided pursuant to any other laws of this State, the commissioner may assess against the client an additional amount as liquidated damages, unless the client proves a good faith basis for believing that its violation was in compliance with this act. Liquidated damages shall be calculated by the commissioner as no more than 100 percent of the total amount of the underlying contract.]1
1[5. If the commissioner determines that a client has violated a provision of this act by failing to pay the compensation of a freelance worker, the commissioner shall issue to the client an order directing compliance therewith, which shall describe particularly the nature of the alleged violation.]1
1[6. a. The commissioner shall provide to each freelance worker who files a complaint regarding a violation of any of the provisions of section 2 of this act with a description of the anticipated processing of the complaint, including the investigation, case conference, potential civil and criminal penalties, and collection procedures.
b. Each freelance worker and the representative of the freelance worker, if any, shall be notified in a timely manner by the commissioner of the following:
(1) any case conference before it is held, with the opportunity to attend; and
(2) any award and collection of back compensation, civil penalties, any intent to seek criminal penalties, and, in the event that criminal penalties are sought, a notification of the outcome of prosecution.
c. At the time the commissioner receives a complaint alleging a violation of a provision of this act, the commissioner shall refer the freelance worker to the navigation program provided pursuant to section 9 of this act, in addition to providing the information required pursuant to subsection a. of this section.]1
1[7.] 4.1 Any client who does not pay the 1[compensation] remuneration1 of its 1[freelance workers] independent contractors1 in accordance with the provisions of this act, and the officers, agents, or representatives of any client who knowingly permit the client to violate the provisions of this act by failing to pay the 1[compensation] remuneration1 of any of its 1[freelance workers] independent contractors1 in accordance with the provisions of this act, shall be guilty of a disorderly persons offense for the first offense, and in the event that any second or subsequent offense occurs within six years of the date of conviction for a prior offense, shall be guilty of a crime of the fourth degree for each offense.
1[8.] 5.1 a. Except as otherwise provided by law, 1[a freelance worker] an independent contractor1 alleging a violation of a provision of this act may bring an action in any court of competent jurisdiction for damages as described in subsection b. of this section.
(1) Any action alleging a violation of subsection a. of section 2 of this act shall be brought within two years after the acts alleged to have violated this act occurred.
(2) Any action alleging a violation of subsections b. or c. of section 2 of this act shall be brought within six years after the acts alleged to have violated this act occurred.
(3) 1[Within 10 days after having commenced a civil action pursuant to this section, a plaintiff shall serve a copy of the complaint upon the commissioner or the commissioner's designee. The failure to serve a complaint to the commissioner shall not adversely affect any plaintiff's cause of action.
(4)]1 A plaintiff who solely alleges a violation of subsection a. of section 2 of this act shall prove that the plaintiff requested a written contract prior to commencing the performance of any contracted services.
b. A plaintiff who prevails on a claim alleging a violation of this act shall be awarded damages as described in this subsection and an award of reasonable attorney's fees and court costs.
(1) A plaintiff who prevails on a claim alleging a violation of subsection a. of section 2 of this act shall be awarded damages of $250.
(2) A plaintiff who prevails on a claim alleging a violation of subsection a. of section 2 of this act and on one or more claims under other provisions of this act shall be awarded damages equal to the value of the underlying contract for the violation of subsection a. of section 2 in addition to the remedies specified in this subsection for the other violations.
(3) In addition to any other damages awarded pursuant to this subsection, a plaintiff who prevails on a claim alleging a violation of subsection b. of section 2 of this act is entitled to an award of double damages, injunctive relief and any other remedies deemed appropriate by the court.
(4) In addition to any other damages awarded pursuant to this subsection, a plaintiff who prevails on a claim alleging a violation of subsection c. of section 2 of this act is entitled to damages equal to the value of the underlying contract for each violation arising under subsection c. of section 2 of this act.
c. The remedies provided by this section and the remedies provided by any other provision of this act may be enforced simultaneously or consecutively so far as not inconsistent with each other.
1[9.] 6.1 a. The commissioner shall establish a navigation program that provides information and assistance, as set forth in subsection c. of this section, relating to the provisions of this act. The program shall include assistance by a natural person by phone and electronic mail and shall also include information accessible via an Internet website maintained by the Department of Labor and Workforce Development.
b. 1[The commissioner shall make available model contracts on the website for use by the general public at no cost. The model contracts shall be made available in English, Spanish, and any other language that the commissioner determines is the first language of a significant number of workers in the State. This determination shall be, at the discretion of the commissioner, based on the numerical percentages of all workers in the State for whom English or Spanish is not a first language or in a manner consistent with any regulations promulgated by the commissioner for this purpose.
c.]1 The navigation program shall provide 1[the following:
(1) general court information and information about procedures under this act;
(2) information about available templates and relevant court forms;
(3) general information about classifying persons as employees or freelance workers;
(4) information about obtaining translation and interpretation services and other courtroom services;
(5) a list of organizations that can be used for the identification of attorneys; and
(6) other]1 relevant information, as determined by the commissioner, related to the submission of a complaint by 1[a freelance worker or] an independent contractor to the commissioner under section 3 of this act and links to the Internet website of the Administrative Office of the Courts regarding1 the commencement of a civil action under the provisions of this act by 1[a freelance worker] an independent contractor1.
1[10.] 7.1 This act shall take effect immediately.
