Ending Wage Theft and Misclassification in NJ
Wage theft is a rampant problem in the New Jersey non-union construction industry and it drives down standards for all workers. Wage theft is the unlawful withholding of wages or benefits due to an employee. It can take many different forms – from illegal “deductions” from an employee’s pay to outright not paying an employee at all. LIUNA has worked to expose these unscrupulous employers and win back pay in cases across the country.
Violation of Minimum Wage, Overtime and Prevailing Wage Laws
LIUNA and allies in the social justice movement have found many instances of contractors not paying the legally mandated wages due; including ignoring the federal or state mandated prevailing wage on construction sites, having employees work “off the clock,” or paying the regular rate for overtime hours.
In Jersey City, LIUNA members helped non-union workers win back pay denied them by their employer. Through NJDOL enforcement, these projects were shut down and contractors were forced to not only pay back wages but also penalties and fines.
Employee Misclassification
Incorrectly classifying an employee as an independent contractor is a pervasive problem in the New Jersey. Employee misclassification costs the states and federal government billions of dollars annually, in addition to leaving millions of workers without protections and benefits. In its last comprehensive review, the IRS estimated that about 15 percent of employers misclassified a total of 3.4 million employees, resulting in an estimated revenue loss of $1.6 billion. The U.S. Department of Labor has found that 10-30 percent of employers audited had misclassified employees.
Misclassified workers are denied many workplace protections and benefits to which they are entitled.
- Misclassified workers do not have overtime wage and hour protections.
- Misclassified employees must pay self-employment taxes on top of their personal income taxes.
- If a misclassified employee is injured on the job, the worker may have difficulty accessing workers’ compensation and laid-off workers may not be eligible for unemployment compensation.
- Misclassified employees do not receive benefits such as health insurance or paid holidays.
Illegal Deductions
Illegal deductions are a form of wage theft in which an employer takes money out of an employee’s paycheck either for something they should be providing or some other item that is not a lawful charge to the employee.