Employment Classification - Employee Versus Independent Contractor

All business owners who hire workers to perform jobs for their business need to understand whether those workers are employees or independent contractors.  If the workers are employees, then the business is required to comply with a variety of legal requirements, such as keeping time records, paying minimum wage, and paying overtime to non-exempt employees.

Under New Jersey law, a worker is considered an employee unless all the following apply:

  1. The individual has been and will continue to be free from control or direction over the performance of work performed, both under contract of service and in fact; and
  2. The work is either outside the usual course of the business for which such service is performed, or the work is performed outside of all the places of business of the enterprise for which such service is performed; and
  3. The individual is customarily engaged in an independently established trade, occupation, profession or business.

The determination of employee versus independent contractor status is particularly difficult in certain situations. It is important to know the law; the consequences for not knowing can be significant.

We can help New Jersey workers and businesses address any wage and hour problems. Questions?  Contact Alex Pisarevsky at ap@njlawfirm, or (201) 845-9600.