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.
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
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!
