The Main Square — It has been reported by officials in New Jersey that a multi-agency probe has recovered $1.3 million in stolen salaries for employees.
Twenty contractors working at 88 Regent Street in Jersey City have been fined as a result of an investigation by the state’s Labor and Workforce Development, Treasury, Banking and Insurance, and Attorney General’s offices into allegations that the contractors were misclassified as independents or paid off-the-books.
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Attorney General Matthew J. Platkin issued a statement saying, “We will not allow firms and contractors that cut corners to make an additional buck.” Those who are wrongfully classified as independent contractors violate the law and do harm to their coworkers and their families.
According to the findings of the investigation, the contractors were also accused of not providing workers’ compensation insurance, not paying the correct taxes on construction materials, and neglecting to pay overtime to their employees.
The Department of the Treasury discovered that fourteen of the contractors had outstanding tax difficulties, and a jeopardy assessment warrant was issued to one contractor based outside of the country for failing to pay their taxes.
Officials said they have collected $46,597 of the $104,092 in overdue taxes levied on the non-compliant businesses.
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As legal proceedings are resolved, the Labor Department has pledged to maintain its pursuit of collecting the assessed back pay and penalties.
The government organization emphasized that any contractor might file an appeal against the accusations.
Over $460 million in underreported gross salaries and $14 million in missing state unemployment and disability benefits were discovered in a 2018 Department of Labor examination of over 12,300 incidents of worker misclassification.
The audit only looked at one percent of businesses, thus the real cost of misclassification is likely far more than estimated.
In 2021, Governor Phil Murphy signed a set of bills into law that strengthened the state’s labor laws in an effort to prevent the misclassification and abuse of workers by private businesses.
According to Murphy, employees who are incorrectly classified as independent contractors are denied the right to receive proper compensation and benefits until the measure is signed in July 2021. These methods of doing business are abusive, illegal, and unjust, and they must be stopped.
The state’s commissioner of wage and hour compliance, Joseph Petrecca, said the crackdown demonstrates the state’s commitment to “keeping employers responsible to our state’s wage, benefits, and tax laws.”
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The company “wants to make sure employees aren’t paid less than what they deserve for an honest day’s work,” he said. “We have just completed a massive investigation, and our work on this case and future enforcement are far from over.”