Labor and Employment

Published on: April 8, 2012

Employee or Independent Contractor? New Jersey Business Taxpayers Can Correct the Misclassification of Workers with Minimal Tax Liability

Businesses with any New Jersey employees are responsible for withholding and paying income taxes, Medicare taxes, and Social Security, and paying payroll taxes on wages paid to their employees. However, in general, the same businesses do not have to do so when hiring independent contractors.

Therefore, it may be tempting for a business to classify all workers as independent contractors to avoid payments. However, the Internal Revenue Service and New Jersey Division of Taxation have stringent regulations to ensure that businesses correctly classify their workers. The IRS imposes significant penalties on businesses which have misclassified their workers as independent contractors.

A worker is an independent contractor if the “employer” has the right to direct only the result, but not the way in which the worker performs her job. For example, if a business hires a New Jersey attorney to sue another company for breach of a contract, the business does not direct the attorney on how to argue the case, what motions to file, etc. The client educates the attorney about the dispute and asks the attorney to work towards a certain result (recovering lost profits). Therefore, this attorney is a New Jersey independent contractor, not an employee.
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Published on: March 30, 2012

NEW YORK AND NEW JERSEY PREGNANCY DISCRIMINATION

by Maurice W. McLaughlin

Pregnancy Discrimination
In 2011, the Equal Employment Opportunity Commission (“EEOC”) received the largest number of complaints of pregnancy discrimination in its history. Pregnancy discrimination has been increasing since at least 1992. Pregnancy discrimination in New Jersey, New York and nationally continues to be a major problem.

It is illegal to discriminate against pregnant mothers. Pregnancy discrimination in New York and New Jersey is barred by law. Employers may not refuse to hire pregnant women, fire pregnant women, or lay employees off because of their pregnancy, harass or transfer them because of their pregnancy, or shift them to work that is perceived as “safer” or “lighter.” The only exception is that transfers can be made as a legitimate accommodation for the specific medical needs of a particular employee.

Employers are permitted to ask the estimated delivery date and expected length of leave before and after delivery, but they are not allowed to ask for a specific date that pregnancy leave will begin. Employers must rehire mothers after delivery, and make reasonable accommodations beforehand.

New Jersey Law
New Jersey’s Law Against Discrimination bans discrimination based on “sex.” The New Jersey’s Supreme Court has ruled that sex discrimination includes discrimination based on pregnancy.

Federal Law
Title VII of the Civil Rights Act of 1964 likewise prohibits pregnancy discrimination. In 1978, Congress enacted the Federal Pregnancy Discrimination Act. The Federal Pregnancy Discrimination Act amended Title VII to include pregnancy discrimination as sex discrimination. It also prohibits discrimination based on medical conditions related to pregnancy. It provides that if an employer offers a health plan, pregnancy must be a covered condition. However, the Federal Pregnancy Discrimination Act, being part of Title VII, only covers employers with 50 or more employees.
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Published on: March 27, 2012

the cats paw

by Maurice W. McLaughlin

Both state and federal laws govern family leave in New Jersey. The Federal Family and Medical Leave Act (FMLA) and New Jersey Family Leave Act (FLA) have long provided 12 weeks of unpaid family leave for employees of employers with at least 50 employees. In 2008, New Jersey passed the New Jersey Paid Family Leave Act.

The Paid Family Leave Act mandates six weeks of paid family leave to care for a newborn or newly-adopted child, or to care for a family member with a serious health condition.

Eligible employees receive two-thirds of their salary (up to $524 per week). The benefits are paid by the State and funded by a tax from all employees’ paychecks; employers do not incur any direct costs.
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Published on: March 25, 2012

The Cat’s Paw In Federal And New Jersey Discrimination Cases

by Maurice W. McLaughlin

The United States Supreme Court recently ruled that a fired employee can sue his employer for the harm he suffered from “cat’s paw discrimination” because of his membership in the Army Reserve. Federal and state courts have ruled that “cat’s paw” liability applies in a wide variety of other New Jersey discrimination.

The Cat’s Paw.

In Aesop’s Fables, a monkey convinces a cat to pull chestnuts from a fire. The monkey then eats them, leaving the cat with burnt paws and no chestnuts. A “cat’s paw” case happens when a decisionmaker has no intent to discriminate herself, but fires or penalizes in reliance on another employee’s input which was motivated by discrimination. It is sometimes been called “subordinate bias” because it holds the employer responsible for the discrimination or retaliation of someone below the decisionmaker.

The Supreme Court and Cat’s Paw Discrimination Against Members of the Armed Forces.

The United States Supreme Court recently allowed a hospital employee who was fired because of his Army Reserve service to sue for “cats paw” discrimination.
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Published on: March 8, 2012

Whistleblower Protection: Employers Can’t Fire New Jersey Whistleblowers or Their Fiancés

by Maurice W. McLaughlin

The United States Supreme Court recently issued a decision on a contentious question in employment law , with important implications for New Jersey employment disputes – can an employee who did not engage in protected activity sue his employer for firing him to retaliate against a friend or family member who is a whistleblower? Lower courts had split, but the Supreme Court unanimously sided with the employee and said yes.

Anti-Discrimination Statutes

Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment because of an employee’s “race, color, religion, sex, or national origin.” New Jersey’s Law Against Discrimination also prohibits discrimination for these reasons, and also because of an employee’s age, ancestry, disability, marital or civil union status, domestic partnership status, sexual orientation, gender identity, atypical hereditary cellular or blood trait, military service obligations, nationality, genetic information, refusal to submit to a genetic test, or refusal to let an employer know the results of a genetic test.

Both Title VII and the New Jersey’s Law Against Discrimination prohibit employers from retaliating against employees who make complaints of discrimination.
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Published on: February 29, 2012

Looking for a Job in New Jersey – Employees Beware!

by Boris Peyner

Employers commonly require that potential employees sign agreements waiving their right to jury trials and, instead, requiring them to arbitration all disputes arising from their employment. New Jersey and Federal law supports enforcement of arbitration agreements.

Arbitration agreements are controlled by the Federal Arbitration Act and the New Jersey Arbitration Act. In arbitration, a dispute is submitted to a neutral third-party who makes a binding decision.

Although arbitration can be cheaper and faster than litigation, it is more advantageous to the employer. First, a decision is made by a single person (usually a lawyer or a retired judge) instead of a jury, which might be more sympathetic to an employee (especially since the arbitrator will know that the employer drafted the agreement and chose arbitration). In addition, discovery of information between the parties is significantly limited, favoring the employer which has most of the evidence, especially in a suit for wrongful firing. It is also difficult to appeal an arbitration agreement.

It is important to read employment documents presented carefully. People presented with arbitration agreements should seek an attorney’s advice because courts generally enforce arbitration agreements, even though they appear to be contracts of adhesion. A contract of adhesion is an agreement that is presented on a take-it-or-leave-it basis by a party with dominant bargaining power. Normally contracts of adhesion are unenforceable. However, in 2002 the New Jersey Supreme Court in Martindale v. Sandvik, Inc., ruled that employment agreements requiring arbitration are not contracts of adhesion.
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