Earlier this year, the New Jersey Supreme Court held that the “ABC test” should apply to determine whether a worker is an “independent contractor” for the purposes of the New Jersey Wage Payment Law and the New Jersey Wage and Hour Law.
As expected, the decision regarding the “ABC Test” is already having a significant impact on employment suits.
In the wake of the precedential decision, the Third Circuit Court of Appeals has revived a putative class action against Sleepy’s, LLC. The plaintiffs in the case worked as delivery drivers for the mattress retailer. Their federal employment lawsuit alleges that they suffered various financial and non-financial losses as a result of defendant’s misclassification of them as independent contractors, rather than employees. The plaintiffs each signed an Independent Drive Agreement, which they maintain was designed to deny them employee benefits.
As previously discussed on the Scarinci Hollenbeck Business Law Blog, the ABC test presumes that an individual is an employee unless an employer can show that:
The employer neither exercised control over the worker, nor had the ability to exercise control in terms of the completion of the work;
The services provided were either outside the usual course of business or performed outside of all the places of business of the enterprise; and
The individual has a profession that will plainly persist despite termination of the challenged relationship.
Failure to satisfy any one of these three criteria results in an “employment” classification.
While the three-factor test is fairly straightforward, it assumes that a worker is an employee. As a result, employers like Sleepy’s often have an uphill battle when defending wage and hour suits.
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future
For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
