NJ SB 2548
Provides exemption from “unemployment compensation law” for operators of certain motor vehicles licensed for commercial use; eliminates current exemption for operators of commercially licensed vehicles weighing 18,000 pounds or more.
This bill provides that services performed by an operator of a motor vehicle are not covered by the “unemployment compensation law,” R.S.43:21-1 et seq., if: 1. The vehicle is licensed for commercial use under federal transportation regulations; 2. The operator owns the vehicle or leases or finances the purchase of the vehicle through an entity which is independent of the entity for which the services were performed; 3. The motor carrier complies with federal Form 1099 reporting requirements with respect to compensation paid to the operator of the motor vehicle; 4. There is a written lease with a motor carrier which complies with federal leasing regulations; and 5. The operator of the motor vehicle is able to refuse to work without consequence and to accept work from multiple entities in compliance with statutory and regulatory limitations without consequence, provided that an operator shall not be considered an employee of the entity for which services are performed solely because that operator chooses to perform services only for that entity. The bill makes each individual operator who meets these criteria both ineligible for unemployment insurance (UI) benefits and not subject to UI taxes. The bill provides the exemption to all such individuals categorically without requiring a demonstration that particular individuals are self-employed under the standards provided by either the State UI statute or federal tax rules. The bill’s exemption applies without regard to requirements of the federal UI law. The bill also removes the current exemption from UI coverage for operators of commercially-licensed motor vehicles weighing 18,000 pounds or more used for highway movement of motor freight, who own, or lease or finance the purchase of, the vehicle through an independent entity, and are compensated by a share of gross revenue or according to a schedule of payments based on the distance and weight of shipments.
This bill is not getting enough support to move forward at this time. The NJ DOL has adopted an amended regulation (50 N.J.R. 1026(a) that eliminates the 20 Factor Test as proof that independent contractors are exempt from Federal Unemployment Tax (FUTA) in order to utilize the exemption from unemployment insurance. In addition, the Governor has formed a Task Force on Employee Misclassification. Companion to AB 3910.
05/14/2018 Introduced. Referred to Senate Committee on Labor.