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Penalties For Misclassifying Employees In New Jersey


If you are running a business in New Jersey, you probably already know that there is a big difference between independent contractors and employees. If you’re working with independent contractors, you are not required to worry about things like benefits, employment insurance, and other details. Because there are certain advantages to working with independent contractors, many businesses misclassify their actual employees as such. But what kind of penalties might you face if you do this?

If you are facing fines or legal consequences after misclassifying employees in New Jersey, it makes sense to get in touch with a legal professional, such as a criminal defense attorney. These individuals can help you seek a positive legal outcome in an efficient manner.

Why the Government Takes this So Seriously

The Department of Labor takes the misclassification of employees very seriously, especially in the era of Covid-19 when employee benefits have become such a major talking point. When employees are misclassified, they may lose the ability to go on medical leave. This is a big deal during the pandemic. In addition, they may lose the right to unemployment insurance. The government is also concerned about this matter because it leads to lower tax revenues.

Stop Work Orders 

One of the most notable consequences for misclassifying employees is a stop-work order. The Commissioner of Labor and Workforce Development has the power to issue stop-work orders if you violate wage, benefit, or tax laws. You must also continue to pay your workers during this period. If you fail to pay wages within 10 days, you could be fined $5,000 per day. 


You may also face an immediate injunction for these violations. If the Commissioner is successful, you may also be forced to pay its legal fees, including investigation costs. This injunction will force you to pay employees, provide them with benefits, or otherwise remedy the situation that you have created by misclassifying your workers. 


You may also face fines if you “purposely or knowingly” misclassify your employees. This is due to the New Jersey Insurance Fraud Prevention Act. Under these laws, you may face a violation of $5,000 for your first violation. If you commit a second violation, you may face a fine of $10,000. All subsequent violations then come with a fine of $15,000 each. Although this law has passed, it was reported that it would only go into effect on January 1st of 2022.

Enlist the Help of a Qualified Criminal Defense Attorney Today 

If you are facing any kind of legal challenges with your business, reach out to New Jersey criminal attorney Phillip J. Murphy. We have helped numerous defendants in New Jersey escape unnecessary legal consequences. If you’re running a business in the Garden State, you’re probably dealing with significant economic pressures due to the present state of the world. The last thing you need is a fine worth thousands of dollars. Book your consultation today, and we can develop an effective action plan together.



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Phillip J. Murphy,
Attorney At Law
Free Consultations Calls Answered and returned 24/7 Phone: (845) 639-6600 Fax: (845) 639-6620

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New City, New York 10956

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Phillip J. Murphy, Attorney At Law is located in New City, New York and serves clients in and around New York, New Jersey & Connecticut. Contact our experienced criminal defense law firm.
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