N.J. takes aim at businesses that dodge payroll taxes
Critics say Senate proposal could turn regulation ‘into a witch hunt’ the bill was released by the state senate national brotherhood of electrical Workers and
labor Committee on June 15 and is up for con- the new Jersey state pipe trades Association.
By ANDREW KITCHENMAN classify workers as independent contractors. sideration by the Assembly labor Committee. bricklayers state director Richard Tolson
A bill to suspend or revoke the licenses of bill co-sponsor sen. Stephen M. Sweeney but sen. Sandra Cunningham (d-Jersey said it now takes far too long for the state to
businesses that pay workers under the table is (d-West deptford) said the City) asked whether employers would be tar- investigate whether violators continue to oper-
being considered by the legislature. bill grew out of the work of geted by anonymous tips. “i can see it turning ate using state licenses.
the measure could affect a wide range of Gov. Jon S. Corzine’s blue into a witch hunt,” she said. the measure is opposed by the Commerce
businesses, from landscapers to funeral homes, Ribbon Advisory panel sen. Sean T. Kean (R-Wall) said steps should and industry Association of new Jersey, the
if the state determines they don’t pay wages on immigration policy. be taken to help workers, but expressed concern state Chamber of Commerce and the Chamber
and payroll taxes. sweeney said the problem business owners could be penalized due to tech- of Commerce of southern new Jersey.
the measure allows the state department with unpaid wages and nicalities. “We don’t want to put undue pressure sen. Marcia A. Karrow (R-Flemington)
of labor and Workforce development to audit taxes rests with unscrupu- and burdens on employers,” Kean said, adding said she would support an effort that discour-
a business that allegedly failed to keep records lous employers, not work- Stephen M. Sweeney some employers may not be aware of violations. ages hiring illegal aliens, but she said she was
of paying wages or payroll taxes. if the business ers. He said businesses see state fines for violating bill co-sponsor sen. Fred H. Madden concerned the duration of suspensions could
is found to have violated the law, it would face a payroll laws as a cost of doing business. Jr. (d-Washington) said employers would be open-ended. she abstained from the labor
license suspension for the first offense and the “there are businesses in this state — not a have multiple chances to correct violations Committee vote, which was 5-0.
loss of the license for the second offense. lot — that take advantage of workers by paying before their licenses are revoked permanently. Madden denied the bill targets undocu-
A potential problem for employers is that them off the books, and that needs to stop,” he the first chance would come when they are mented immigrants; an identical bill is to be
state officials would be left with too much power said. “it’s unfair to workers; it’s also unfair to informed of the allegation; the second, after considered by the Assembly labor Committee.
to decide on the penalties, opening up the possi- other businesses.” they have been audited; the third, after a tem- Rutgers university professor Janice Fine
bility of targeting certain businesses, said Chris- the immigration panel found that the porary license suspension. said the problem of misclassifying workers
tine Stearns, vice president of health and legal practice of misclassifying workers as indepen- stearns said the suspension would shut occurs because governance of the labor market
affairs for the new Jersey business & industry dent contractors is disproportionately com- down businesses that depend on their licenses. has been lagging.
Association. she also said vague language about mon among immigrant workers. in 2007, the “since you can’t do business without it, it really is “new Jersey has clear regulations on
how the state first determines whether a viola- state identified more than 31,000 misclassified a revocation,” not a suspension, she said. what an employee is and what an employer
tion occurred raises legal questions. or nonreported workers, more than $482 mil- the measure is supported by labor unions, is,” Fine said. “And it’s not up to the employer
supporters of the proposed law said it lion i