Why Classification Matters For New Jersey’s Cleaning Employees

Employees are entitled to minimum wage, overtime pay, unemployment benefits, paid family leave, workers’ compensation coverage, and protections under New Jersey’s anti-discrimination and retaliation laws. Employers also pay payroll taxes on their behalf.

Independent contractors are considered self-employed. They don’t receive wage protections, unemployment or workers’ compensation benefits, or paid leave. They also must cover their own tax obligations, which can be a significant financial burden.

The ABC Test: New Jersey’s Standard For Contractor Classification

A: Control — The worker is free from the company’s control in performing their job. This means they decide how and when to work, without being directed.

B: Business Relationship — The work performed is outside the usual course of the company’s business or outside its places of business.

C: Independent Trade — The worker is engaged in an independently established trade, business, or profession of the same nature as the work performed.

Cleaners are usually told when to report to work, what buildings to clean, and how to perform their tasks. That fails Part A.

Cleaning is not outside the scope of a cleaning company’s business — it is the business. That fails Part B.

Many workers rely solely on one company for assignments rather than running their own cleaning enterprise. That fails Part C.

Red Flags Of Misclassification In New Jersey’s Cleaning Services

Set Schedules And Supervision. If your employer tells you when to work and has supervisors checking your performance, you are likely an employee, not an independent contractor. True contractors control how and when they complete their jobs.

Employer-Supplied Tools And Uniforms. Many cleaning companies provide supplies, equipment, or even uniforms. Contractors typically supply their own materials, so this is another strong sign of employee status.

Exclusive Work. If you are discouraged or prohibited from working for other companies, this undermines the idea that you are an independent business owner.

Same Work As Employees. If you perform the same tasks as recognized employees but lack benefits and protections, your classification is questionable.

Hourly Pay Instead Of By Project. Contractors are usually paid per project or by contract. If you are paid hourly or per shift, that’s more in line with employee treatment.

Fragmented Work Structure: Cleaning jobs are often subcontracted, with layers of contractors and subcontractors. This creates confusion and helps employers distance themselves from direct responsibility.

Low Union Representation: Many cleaning workers are not unionized, leaving them without collective bargaining power to challenge unfair treatment.

High Turnover: With many workers cycling through jobs, employers often count on people moving on before challenging misclassification.

Stop-Work Orders – The Department of Labor can immediately shut down worksites where misclassification is found.

Financial Penalties – Employers face heavy fines, plus liability for unpaid wages, benefits, and back taxes.

Joint Liability – General contractors can be held responsible for subcontractor misclassification, a rule that directly impacts industries like cleaning services.

The Cost Of Misclassification For New Jersey’s Cleaning Employees

Lost Overtime Pay: Many cleaning workers put in long hours, especially at night. Misclassified workers may not receive legally required overtime.

No Workers’ Compensation: Cleaning can be physically demanding, and injuries are common. Without employee status, you may be left paying medical bills on your own.

No Unemployment Benefits: If you lose your job, you may not qualify for unemployment insurance.

Higher Tax Burden: When you’re misclassified as an independent contractor, <a href="/blog/how-misclassification-affects-your-taxes-in-nj">misclassification affects your taxes</a> in ways many workers don’t expect. Instead of splitting contributions with an employer, you’re responsible for both the employer and employee portions of Social Security and Medicare, plus self-employment taxes.

No Job Security: Contractors can be terminated abruptly, with fewer legal protections against retaliation.

Document Your Work Conditions. Keep records of your hours, pay, assignments, and supervision. This evidence can help prove employee status.

Raise The Issue Internally. Sometimes, employers are misinformed or careless rather than malicious. Bringing up the issue internally may lead to corrections.

File A Complaint With The <a href="https://www.nj.gov/labor/">NJ Department Of Labor</a>. The state takes misclassification seriously and investigates claims. You can file a complaint confidentially.

Consult With A Lawyer . A New Jersey misclassification lawyer can help assess your situation and advise whether you have grounds for a claim. They can also protect you from retaliation.

Contact Us For Legal Advice And Free Consultation

Misclassification in NJ Cleaning Services: Employee or Contractor?

What Is Worker Misclassification And What Does It Means In NJ

Independent contractors are generally self-employed. They set their own schedules, use their own tools, control how the work gets done, and work with multiple clients.

Employees are tied more directly to the company. The employer controls their schedules, dictates how the work is done, and provides tools or platforms for completing tasks.

The Consequences Of Misclassification New Jersey’s Drivers May Face

Minimum wage guarantees. Contractors are typically paid per delivery, and after expenses, hourly earnings can fall below the state’s minimum wage&nbsp; (<a href="https://www.nj.gov/labor/wageandhour/support/faqs/wageandhourworkerfaqs.shtml">$15.49 per hour</a> for most workers in New Jersey as of 2025).

Overtime pay. Employees must receive time-and-a-half after 40 hours; contractors get no such guarantee.

Workers’ compensation. Injuries on the job may mean uncovered medical bills and lost wages.

Unemployment benefits. Contractors are usually ineligible if work slows or stops.

Employer-provided benefits. Health insurance, paid sick leave, and retirement contributions are often off the table.

Tax consequences. <a href="/blog/how-misclassification-affects-your-taxes-in-nj">Misclassification affects taxes too</a>. Contractors must pay the full share of the “self-employment tax” and handle quarterly tax payments, costs that employers would normally share.

How New Jersey Defines Employment And Why It Matters For Delivery App Drivers

Control. Delivery apps set pay rates, dictate routes, and can deactivate drivers at any time.

Nature of the business. Delivering food and goods is the company’s main business, not outside it.

Independently established business. Most drivers do not operate a separate delivery company with multiple clients and their own customer base.

The app dictates your schedule, assigns deliveries, or sets strict acceptance rates.

You face penalties or deactivation for rejecting too many orders.

The app sets your pay and tips policies without negotiation.

You do not run an independent business that serves multiple clients outside the platform.

Why Companies In New Jersey May Misclassify Their Drivers

Do not provide unemployment insurance or workers’ compensation.

Do not have to pay overtime or minimum wage guarantees.

Shift business costs (like gas, car maintenance, and phone data) onto drivers.

New Jersey’s Strong Enforcement Against Missclassification

The <a href="https://www.nj.gov/governor/news/news/562019/20190806a.shtml">New Jersey Wage Theft Act signed in 2019</a> allows employees to recover unpaid wages, plus significant penalties, if they were misclassified and denied minimum wage or overtime.

The <a href="https://oui.doleta.gov/unemploy/uitaxtopic.asp#:~:text=The%20Federal%20Unemployment%20Tax%20Act,if%20necessary%2C%20to%20pay%20benefits.">Unemployment Compensation Law</a> requires employers to pay into unemployment and temporary disability funds. Misclassified workers can file claims to access these benefits.

The <a href="https://www.nj.gov/lps/dcr/downloads/NJ-Law-Against-Discrimination-Most-Updated.pdf">New Jersey Law Against Discrimination</a> protects workers, including those challenging misclassification, from retaliation.

Audits and investigations. NJDOL can audit payroll records, interview workers, and demand back pay.

Stop-work orders. The state can halt business operations if misclassification is found.

Fines and penalties. Employers may face heavy fines and be required to pay back wages, overtime, and unpaid taxes.

Joint liability. Companies that use subcontractors can be held responsible for violations down the chain.

What Delivery App Drivers In NJ Can Do If They Suspect Misclassification

File a complaint with the <a href="https://www.nj.gov/labor/">New Jersey Department of Labor and Workforce Development (NJDOL)</a>. The state investigates misclassification claims and can order companies to pay back wages, benefits, and taxes.

Join or support lawsuits. Collective action makes it harder for companies to ignore systemic problems. Delivery drivers across the country have filed lawsuits challenging their classification, some of which have led to major settlements.

Speak with a lawyer. A misclassification lawyer experienced in New Jersey wage and hour law can help drivers understand their rights and build a case.

How Misclassification Affects The Gig Economy In New Jersey

Misclassified As A Contractor? We Can Help

Misclassification in NJ Delivery Apps: Drivers’ Legal Options

Taxes and benefits. Independent contractors are responsible for their own income taxes, Social Security contributions, and health insurance. Employees, by contrast, have taxes withheld and may receive benefits such as health coverage, retirement plans, or paid leave.

Wage and hour protections. Employees are entitled to minimum wage (<a href="https://www.nj.gov/labor/wageandhour/support/faqs/wageandhourworkerfaqs.shtml">$15.49 per hour for most workers in New Jersey as of 2025</a>), overtime, and regular paydays under state and federal law. Independent contractors are not.

Unemployment and workers’ compensation. Employees can collect unemployment benefits if they lose their job and workers’ compensation if injured on the job. Independent contractors usually cannot — showing how <a href="/blog/how-misclassification-affects-nj-workers-compensation-eligibility">classification impacts compensation eligibility</a> and why accurate worker classification is critical.

Legal liability. Brokers may be responsible for employment taxes, back wages, or penalties if they misclassify workers. Consulting a misclassification attorney in New Jersey can help navigate these risks for both workers and employers.

The General Rule Of New Jersey Classification

A: The worker is free from the company’s control in performing the work.

B: The work is outside the usual course of the company’s business or performed outside its places of business.

C: The worker is customarily engaged in an independently established trade, occupation, or business.

The Special Status Of Real Estate Contractors In NJ

Federal law exemption. <a href="https://www.irs.gov/businesses/small-businesses-self-employed/licensed-real-estate-agents-real-estate-tax-tips">The Internal Revenue Service (IRS)</a> specifically allows licensed real estate agents to be classified as independent contractors for tax purposes, provided certain conditions are met.

New Jersey state law carve-out. In 2022, <a href="https://repo.njstatelib.org/server/api/core/bitstreams/80ebaf72-2cba-405c-9b1d-ecb960ac08b6/content">New Jersey amended the law (P.L. 2018, c.71)</a> that reaffirmed the independent contractor status of most real estate agents. The law essentially says that as long as a real estate salesperson has a written contract stating they are an independent contractor, they will not be considered an employee under state wage, tax, and employment laws.

Excessive control — if a broker dictates an agent’s daily schedule, requires set work hours, or micromanages how tasks are completed, the arrangement may resemble employment.

Payment structures — paying an agent an hourly wage or salary instead of commission undermines independent contractor status.

Required office presence — mandating daily in-office work beyond what licensing compliance requires can make the relationship look like employment.

Exclusive arrangements — prohibiting agents from working with other brokerages without legal basis may suggest employee-level control.

State And Federal Oversight of Misclassification

<a href="https://www.nj.gov/labor/">New Jersey Department of Labor and Workforce Development (NJDOL)</a>. Investigates misclassification complaints and can order back pay, taxes, and penalties.

<a href="https://www.irs.gov/">Internal Revenue Service (IRS)</a>. Reviews tax treatment to ensure proper withholding and payment of Social Security and Medicare taxes.

<a href="https://www.njoag.gov/about/divisions-and-offices/division-on-civil-rights-home/">New Jersey Division on Civil Rights (DCR)</a>. Handles complaints if misclassification leads to discrimination or unequal pay.

Read your contract carefully. Make sure it clearly states your status as an independent contractor and outlines how you will be paid. Keep records of your hours, tasks, and any instructions you receive. This can help if there’s a dispute later.

Watch for red flags. If your broker sets strict hours, pays a regular salary, or controls your day-to-day work, you may actually be an employee.

Seek legal guidance. Misclassification laws can be tricky, and the real estate carve-out adds another layer of complexity. A misclassification attorney in New Jersey can review your contract and advise you on the state’s law.

Why This Matters In A Changing New Jersey Industry

Worried About Real Estate Misclassification? We’re Here To Help.

NJ Real Estate Agents: Independent Contractors or Employees?

Medical treatment for the injury or illness

Temporary disability benefits while you cannot work

Permanent disability benefits if your injury leads to lasting impairment

Death benefits for surviving family members if a worker is killed on the job

Avoid covering overtime or minimum wage protections

Avoid paying into unemployment or disability insurance

Avoid the cost of workers’ compensation insurance

Protections under anti-discrimination laws

How New Jersey Decides Who Is An Employee

A: The worker is free from the employer’s control or direction in performing the work.

B: The work is outside the usual course of the employer’s business, or is performed outside of the employer’s places of business.

C: The worker is engaged in an independently established trade, occupation, or business.

A delivery driver is told when and where to work, wears the company’s uniform, and uses a company vehicle. The company calls them an independent contractor, but under the ABC test, they are likely an employee entitled to workers’ comp.

A construction worker is hired for a project, works under a foreman’s direction, and uses tools provided by the company. Even if paid as a contractor, they probably qualify as an employee.

A freelance graphic designer who sets their own schedule, works for multiple clients, and provides their own tools is more likely a legitimate independent contractor.

What Happens If You Are Misclassified And Injured

Challenge the classification. You can file a claim with the New Jersey Division of Workers’ Compensation and argue that you should be considered an employee.

Seek state intervention. The <a href="https://nj.gov/labor/">New Jersey Department of Labor and Workforce Development (NJDOL)</a> investigates misclassification and can penalize employers who break the rules.

Pursue damages. In some cases, if workers’ comp is denied, you may be able to bring a lawsuit against your employer for negligence — something employees typically cannot do.

Orders to pay back wages, taxes, and insurance contributions

Exposure to lawsuits from injured workers

Potential criminal liability for repeated or intentional violations

Cost savings for employers. By avoiding workers’ comp insurance, employers save money in the short term.

Complex industries. Sectors like gig work, trucking, construction, and even remote work create flexible or layered employment relationships that make <a href="/blog/can-remote-freelancers-be-misclassified-under-nj-law">misclassifying remote freelancers</a> or other workers easier to justify.

Worker confusion. Many employees are not aware of their rights and accept contractor labels without question.

Keep records. Save pay stubs, contracts, schedules, and communications that show the level of control your employer has over your work.

File a claim. Submit a workers’ compensation claim with the <a href="https://www.nj.gov/labor/workerscompensation/">New Jersey Division of Workers’ Compensation</a>. Even if your employer disputes it, the court can determine your status.

Report to NJDOL. You can file a complaint with the New Jersey Department of Labor, which investigates misclassification cases.

Get legal advice. An employment lawyer can help evaluate your classification and represent you in a claim or lawsuit.

Protecting NJ Workers From Misclassification

Denied Workers’ Compensation Benefits? Contact Us For Free Consultation

How Misclassification Affects NJ Workers’ Compensation Eligibility

The Line Between Employees and Contractors

Who controls your schedule and how you do your work

Whether your work is part of the company’s main business

If you supply your own tools or rely on the company’s equipment

Whether you’re free to take on other clients in the same line of work

How you’re paid: a flat project fee versus hourly wages

New Jersey’s ABC Test For Independent Contractors

A — You’re free from the company’s control when performing your work.

B — The work you do is outside the usual course of the company’s business.

C — You run your own independently established business in the same trade.

Big Moves in New Jersey on Misclassification

In 2022, <a href="https://www.nj.gov/labor/lwdhome/press/2022/20220913_misclassification.shtml">Uber agreed to pay $100 million</a> to the state over unpaid unemployment and disability contributions tied to driver misclassification.

In 2025, the New Jersey Department of Labor proposed new rules to clarify <a href="https://www.nj.gov/labor/lwdhome/press/2025/20250428_ABC.shtml">how the ABC test should be applied</a>. The idea is to make it harder for companies to skirt the law while still allowing real contractors — like accountants, plumbers, or graphic designers who run their own businesses — to stay independent.

Your company sets your schedule and tells you exactly how to do your job.

You perform work that is central to the company’s business.

You don’t market yourself as a separate business or have your own client base.

You use the company’s tools, software, or systems instead of your own.

You’re paid like an employee — hourly, weekly, or by shift — rather than by project.

Pressure companies to adopt fairer policies

Where Does This Leave Independent Contractors in New Jersey?

True independent contractors — people who run their own businesses, set their own rates, and work for multiple clients — generally cannot unionize in New Jersey. They also have to be careful about collective rate-setting because of antitrust laws.

Misclassified workers — those treated like contractors on paper but employees in practice — may actually have the right to organize. Both federal law and New Jersey’s ABC test offer ways to challenge misclassification.

Have Questions About Union Options? Contact Us For Your Free Consultation

Can Independent Contractors Unionize in New Jersey?

Independent Contractor vs. Employee in NJ — What’s the Difference?

Freedom from control — The worker must be free from the control or direction of the business, both in practice and in the contract.

Work outside the usual course of business — The work performed must be outside the usual course of the employer’s business, or performed outside the employer’s regular place of business.

Independently established business — The worker must be engaged in an independently established trade, occupation, or business.

Nurses, technicians, and aides often perform work central to the healthcare facility’s mission.

Doctors and specialists may still be considered employees if they are integrated into daily operations.

Billing clerks, coders, or even telehealth workers may fall under “employees” if they don’t have independent businesses of their own.

Why Healthcare Employers Are at Higher Risk

Regulated industry — Patient care and billing practices are tightly controlled by both state and federal law. Missteps get noticed quickly.

High volume of contractors — Temporary nurses, locum tenens doctors, home health aides, and medical coders are frequently classified as contractors.

Control and oversight — In practice, healthcare facilities often exert significant control over when and how these workers perform their duties.

Central to business operations — Almost all of these roles are directly tied to the core mission of healthcare delivery.

Risks of Misclassification for Healthcare Employers

4. Wrongful Termination and Discrimination Claims

A private practice hires nurses as “contractors” but requires them to work fixed shifts, wear uniforms, and follow practice protocols. Because they are under the employer’s control and central to operations, they’re likely employees under the ABC Test.

A hospital contracts with a medical coder who only works for them, at their office, and under strict direction. Even though the hospital labels them as a contractor, the law may disagree.

A home healthcare agency classifies aides as independent contractors but dictates their client visits, schedules, and reporting. Courts in New Jersey have repeatedly found these workers to be employees.

How NJ is Cracking Down on Misclassification

Increased audits — The Department of Labor actively investigates industries with high misclassification rates, including healthcare.

Hefty penalties — Employers can face civil penalties, fines, and stop-work orders.

Joint liability — Staffing agencies and healthcare facilities can both be held responsible if workers are misclassified.

New reporting rules — Employers are now required to post notices informing workers of their rights regarding classification.

Preventing Misclassification in Healthcare Settings

Conduct regular audits — Review all contracts and roles to see if they meet the ABC Test.

Avoid excessive control — The more control you exercise over scheduling, work methods, or job duties, the less likely the worker is truly independent.

Use true independent businesses — Contractors should have their own LLCs, clients, or professional practices.

Stay updated on state law — New Jersey frequently updates enforcement practices, especially in sensitive industries like healthcare.

Get legal guidance — A healthcare labor lawyer can identify risks before the state does.

What to Do If You’re Facing Misclassification Issues

Review your current contracts and roles. Make sure they truly align with the ABC Test.

Evaluate your level of control. If you dictate schedules, procedures, or integrate contractors into daily operations, they may be employees.

Correct misclassifications early. It’s better to fix mistakes now than to face penalties later.

Consult with a labor attorney. A healthcare employment lawyer in New Jersey can walk you through the risks, help you restructure contracts, and represent you if regulators get involved.

Talk to a Lawyer About Misclassification in NJ Healthcare

Employer Risks for Independent Contractor Misclassification in NJ Healthcare

Are not entitled to the same benefits as employees

Whether you’re eligible for unemployment benefits

Whether you’re protected under wage and hour laws

Your ability to sue for discrimination or wrongful termination

How New Jersey Defines Independent Contractors

Employees are entitled to minimum wage and overtime pay.

Independent contractors are not covered by these laws — they set their own rates.

Employees can collect unemployment benefits if they lose their job through no fault of their own.

Independent contractors are generally not eligible.

Employers withhold income taxes and pay Social Security and Medicare taxes for employees.

Independent contractors are responsible for their own self-employment taxes.

Employees are covered by workers’ compensation insurance for work-related injuries.

Independent contractors are not covered unless they purchase their own insurance.

Employees are protected under <a href="https://www.nj.gov/lps/dcr/downloads/NJ-Law-Against-Discrimination-Most-Updated.pdf">New Jersey’s Law Against Discrimination (LAD)</a>.

Employment Law Insights & Resources

Recent Posts

Misclassification in NJ Cleaning Services: Employee or Contractor?

Misclassification in NJ Delivery Apps: Drivers’ Legal Options

NJ Real Estate Agents: Independent Contractors or Employees?

How Misclassification Affects NJ Workers’ Compensation Eligibility

Can Independent Contractors Unionize in New Jersey?

Employer Risks for Independent Contractor Misclassification in NJ Healthcare

Legal Differences Between Freelancers and Independent Contractors in NJ

Misclassification in the NJ Creative Industry: Employee Rights

NJ Employer Penalties for Misclassifying Workers as Independent Contractors

Can Remote Freelancers Be Misclassified Under NJ Law?