What You Need to Know

• A routine audit of a construction company by the Department of Labor and Workforce Development revealed that 16 alleged subcontractors were actually employees under the Unemployment Compensation Law.
• The ALJ ultimately found that 13 of the 16 workers met all three prongs of the ABC test.
• The Appellate Division reached a different conclusion: that five of the 16 subcontractors failed to prove their status as independent entities.

The New Jersey Supreme Court weighed the “less-obvious situation” whether a contractor’s workers are employees or are truly independent entities under the ABC test of the Unemployment Compensation Law, according to an opinion issued by the court.

East Bay Drywall LLC is a contractor operating a drywall installation business in Stone Harbor, Avalon, and Sea Isle. In June 2013, East Bay stopped reporting wages to the Department of Labor and Workforce Development, which spurred a status audit to determine whether East Bay workers hired between 2013 and 2016 were independent contractors or if they were considered employees.

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Read Full Story: https://www.law.com/njlawjournal/2022/08/02/n-j-supreme-court-company-fails-t...