Compliance Stuff

Companies often must determine whether to treat workers as employees or independent contractors.  Workers who are properly classified as independent contractors are not subject to wage and hour laws requiring overtime pay or tax withholding, among other differences between the classifications .  The rules governing how to classify workers under the Fair Labor Standards Act (“FLSA”) frequently change, making this a challenging inquiry for many companies.  Relevant to this issue, last month, the United States Court of Appeals for the Fourth Circuit upheld a $9.3 million verdict against Steadfast Medical Staffing, a healthcare staffing agency who had misclassified approximately 1100 nurses as independent contractors instead of employees under the FLSA.  The case,  Chavez-Deremer v. Med. Staffing of Am., LLC , No. 23-2176 (4th Cir. July 17, 2025), serves as a reminder to companies—especially staffing agencies—to review relationships with their independent contractor...

As independent contractor misclassification enforcement eases up at the federal level, New Jersey is doubling down on the state’s strict test for determining how a worker should be classified under various state laws. The New Jersey Department of Labor and Workforce Development (NJDOL) just took the first major step toward codifying how the agency interprets the “ABC test” and evaluates independent contractor relationships – a move that will not make it easier for New Jersey businesses to treat workers as contractors but will at least provide some much-needed guidance to help you stay compliant. Here’s everything you need to know and three steps you can take next. Quick Background on New Jersey’s Independent Contractor Rules For New Jersey business owners, p roperly classifying workers as employees or independent contractors has long presented legal and operational challenges. Here’s why: New Jersey uses the stringent “ABC test”  for determining whether a worker can be classified...