unemployment

Yesterday, the New Jersey Supreme Court clarified the “ABC test” used to determine if a worker is an employee or an independent contractor. Specifically, it made it clear that just because someone works through their business is not enough to make them an independent contractor.

The case began with a random audit by the New Jersey Department of Labor (“DOL”). The DOL found 16 employees had been misclassified as independent contractors. On appeal, East Bay Drywall (“East Bay”) contested that 11 of them were employees.

The ABC test applies to determine if a worker is an employee or an independent contractor for purpose of several specific laws, including New Jersey’s unemployment compensation law, Wage Payment Act, Wage and Hour Law. Under it, a worker is an employee unless the company he or she worked proves all three of the following:

Earlier this month, in a precedent-setting opinion, New Jersey’s Appellate Division ruled that the unemployment insurance benefits a former employee receives after being fired do not reduce the amount of lost wages the employee can recover in an employment discrimination lawsuit.

Rex Fornaro worked as a flight instructor for Flightsafety International, Inc. After Flightsafety fired him, he brought a disability discrimination and retaliation lawsuit against it under the New Jersey Law Against Discrimination (“LAD”).

After a trial, a jury concluded that Flightsafety had discriminated against Mr. Fornaro because he is disabled and because he requested a reasonable accommodation for his disability. The jury awarded him $83,000 in past economic damages (“back pay”), but did not award him anything for his alleged emotional distress. A judge subsequently awarded Mr. Fornaro’s lawyers a total of approximately $380,000 in attorneys’ fees and costs.

Articles Tagged with unemployment

Working Through Independent Business Not Enough to Make Employees into Independent Contractors

Unemployment Benefits Do Not Reduce Damages from Discrimination