New Jersey’s Construction Industry – Independent Contractor Act

On July 13, 2007, New Jersey’s Construction Industry Independent Contractor’s Act (“CIICA”), N.J.S.A. 34:20-1 to -11 became effective. The express stated Legislative findings underlying CIICA are as follows:

The Legislature finds that employers in the construction industry who improperly classify employees as independent contractors deprive these workers of proper Social Security benefits and other benefits, while reducing the employers’ State and federal tax withholdings and related obligations. Moreover, this practice puts businesses that bear higher costs for complying with the law at a competitive disadvantage.

N.J.S.A. 34:20-2. In order to effectuate these findings, CIICA prohibits, in the specific context of the construction industry, employers from requiring or requesting that “any individual enter into an agreement or sign a document which results in the misclassification of the individual as an independent contractor or otherwise does not accurately reflect the employment relationship with the employer.” N.J.S.A. 34:20-8(a).

“Employment” under CIICA is specifically defined utilizing the Unemployment Compensation Law’s “ABC” Test: “services performed in the making of improvements to real property by an individual for remuneration paid by an employer shall be deemed to be employment unless and until it is shown to the satisfaction of the Department of Labor and Workforce Development that: (a) the individual has been and will continue to be free from control or direction over the performance of that service, both under his contract of service and in fact; and (b) the service is either outside the usual course of the business for which the service is performed, or the service is performed outside of all the places of business of the employer for which the service is performed; and (c) the individual is customarily engaged in an independently established trade, occupation, profession or business. N.J.S.A. 34:20-4.

Under CIICA, “[a]n individual employed as a construction worker who has not been properly classified as an employee may bring a civil action for damages against the employer or any other employer who was in contract with the employee, for failing to properly classify the employee if the employer had knowledge of the misclassification.” N.J.S.A. 34:20-8(b); see also Adami v. Cardo Windows, Inc., Civil No. 12-2804 (JBS/JS), 2013 WL 3821466 at *9 (D.N.J. Jul. 23, 2013) (CIICA “provides a private right of action”). The civil action can be brought individually or as a class action. Ibid. The Court may award attorneys’ fees and costs to successful plaintiffs. Ibid.

CIICA also contains an anti-retaliation provision. N.J.S.A. 34:20-9 (“It shall be unlawful for an employer or any other party to discriminate in any manner or take adverse action against any person in retaliation for exercising rights protected under this act”). The Act actually contains a rebuttable presumption that the taking of an adverse action against a person within 90 days of the person’s exercise of rights protected under CIICA shall have been done so in retaliation for the exercise of those rights. Ibid.

Since construction industry employers sued under CIICA often times fail to pay overtime to their employees, lawsuits filed by employees under CIICA usually assert other causes of action such as violations of New Jersey’s Wage and Hour and Law, N.J.S.A. 34:11-56a to -a38. Such was the case in Adami, supra, 2013 WL 3821466 at *1.

If you are a construction employee and believe you have been misclassified by your employer as an independent contractor, you may very well have a viable and lucrative claim under the Construction Industry Independent Contractor’s Act. Immediately contact the attorneys at The Sattiraju & Tharney, LLP in Princeton, New Jersey at (609) 722-7039 for a free consultation. We fight for workers’ justice under a litany of employee-rights statutes including CIICA.