New Jersey guarantees a minimum wage for all non-exempt employees in the state. In order for an individual to claim a right to minimum wage, they must establish that they are, legally speaking, an “employee.” Some employers try to avoid this obligation by misclassifying employees as independent contractors. This type of practice is considered a minimum wage violation. The federal and state definitions of “employee” differ slightly from one another, but both are based on the extent to which an employer controls how an individual does their job. A lawsuit pending in a Newark federal court alleges misclassification of online workers under both federal and New Jersey employment laws.
New Jersey has developed a concise definition of “employment” for the purposes of determining whether an employer has misclassified an employee as an independent contractor. A court must presume that an individual is an employee unless the employer can establish all three of the following elements:
A. The employer does not have direct control over how the worker does their job, both under the terms of a written contract and in actual practice.
B. The worker’s service is either not part of the employer’s usual business, or they do much of their work off-site.
C. The worker regularly works in their own trade or occupation separate from the employer.
At the federal level, the definition of “employment” in this context is also based on how much control an employer exerts, and how much independence a worker exercises. It is not as specific as New Jersey’s definition, so it tends to be less favorable to employees. The U.S. Department of Labor has stated that it is working on revising the definition.
The defendant in the New Jersey lawsuit operates a webcam business that provides adult-oriented online services. While misclassification disputes have arisen in other types of adult-oriented businesses, it is not clear if any lawsuits have made such allegations against a webcam operator.
According to the complaint, the plaintiff has worked for the defendant since 2016. She describes her job as consisting of two main components. She interacts with customers in “public” chat rooms in order to convince some of them to request a “private” chat room, which costs much more. She alleges that the defendant only pays her for time spent in private chats, even though the public interactions are an essential part of the job. As a result, her hourly rate of pay is allegedly often below both the New Jersey minimum wage, which is currently $14.13 per hour, and the federal rate of $7.25 per hour.
In support of her claim to be an employee of the defendant, the plaintiff describes the extent of control that the defendant allegedly exercises over how she and others do their jobs. She claims that this includes extensive rules regarding “what the Performers may and may not do during a stream.”
She filed the suit as both a collective action under § 16(b) of the Fair Labor Standards Act (FLSA) and a class action under Rule 23 of the Federal Rules of Civil Procedure. She is asserting misclassification claims under the FLSA and New Jersey law.
When employers violate workers’ rights under federal or state employment laws in New Jersey or New York, those workers have rights. A knowledgeable and experienced employment lawyer can advise you of your rights and help you claim damages against your employer. Please contact the Resnick Law Group at 973-781-1204, 646-867-7997, or online today to schedule a confidential consultation to see how we can assist you.