Shield or Vise? The Dual Reality of NJ’s Expanding Labor Enforcement

The WALL is a product of bipartisan legislation (2020) that was part of a broad effort to add teeth to NJ’s labor enforcement efforts – especially when it comes to worker misclassification, wage theft, unpaid workers’ comp and state labor-related liabilities.

A seemingly simple concept  – if a company doesn’t cover its tab to employees or the state, then it’s blocked from being awarded any contract connected to public funds, which includes state, county or local government bodies. In fact, local government bodies are required to cross reference businesses against this list before awarding a contract. It’s not just shaming – any business that lands on the list is locked out of public work.

On its face, a fair response – shortcuts can allow businesses to undercut other companies who are paying the price of abiding by the law.

This month, the Department of Labor added eight more businesses to the WALL that, altogether, owe ~$350k, bringing the total list to 368.  The list as a whole is connected to a collective debt of ~$33M.

The new additions may not be the most important part of the story this month as today’s update comes a little over a week after the DOL updated its ABC Test – the controversial rule changes that affect independent contractors, gig workers and the businesses that employ them.

It may be reasonable to read this as not just an update but a clear message – “we’ve updated the rules and we are enforcing the laws around them.”

And so, on one hand, it can be viewed as a worker protection, fair play law.  On the other hand, it can be viewed as a new enforcement tool for rule changes that a lot of people don’t like in an economy that’s already putting a great deal of pressure on small businesses.

One more ripple effect in what many viewed as a major policy change.

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