New Jersey cites contractors for misclassifying workers

(The Center Square) – The New Jersey Department of Labor and Workforce Development (NJDOL) issued stop-work orders to several out-of-state contractors, and cited them for misclassifying workers.

The agency’s Division of Wage and Hour Compliance investigated concrete and masonry contractor Carol Concrete of Lakeland, Fla., citing four of the company’s subcontractors working on the Brookfield Properties project in Monroe Township.

The state also cited the following companies for misclassifying workers:

5 Star Reinforcement of Carrollton, Ga.Best Hernandez Construction of Charlotte, N.C.Elite Pro Rebar of Stockbridge, Ga.Kico Construction of Kissimmee, Fla.

According to a news release, the state said the subcontractors owe $29,658 in back wages. The state also assessed a misclassification penalty against each subcontractor totaling $5,954, 5% of the workers’ gross earnings for the prior 12 months, which must be paid to the workers.

“Misclassification not only costs our state’s workforce billions of dollars in vital funding to critical worker lifelines like unemployment insurance, it strips workers of their rights to these benefits entirely, including unemployment, overtime, earned sick leave, and minimum wage,” Assistant Commissioner of Wage and Hour and Contract Compliance Joseph Petrecca said in a statement.

The state doled out the penalty under legislation Gov. Phil Murphy, a Democrat, signed into law in January 2020.

According to a news release, the state lifted the stop-work order issued to Carol Concrete after an audit determined subcontractors employed the misclassified workers and assumed responsibility for them. However, state officials say Carol Concrete may be held jointly liable for the misclassified workers if the subcontractors do not pay the assessments.

In addition, the state assessed the subcontractors more than $42,000 in penalties and fees, not including the misclassification penalty. The state did not cite the general contractor, ARCO Design/Build Industrial Philadelphia.