A work arrangement in New Jersey's short-distance and parcel delivery trucking industry would be legally presumed to be an employer-employee relationship, under a bill that received final legislative approval in the New Jersey Senate May 30.

The Truck Operator Independent Contractor Act (A. 1578), which passed along party lines by votes of 21-17 in the Senate and 43-30 in the Assembly, will be considered next by Gov. Chris Christie (R), who has 45 days to act on it.

"This is about employers who are operating outside the rules and taking advantage of their drivers in ways that can deny them basic rights," Senate Majority Leader Loretta Weinberg (D), who sponsored the measure in the Senate, said in a statement. "Employee misclassification has been used to refuse workers the protections of state and federal laws," such as unemployment and disability benefits and the protection of overtime and workers compensation laws, she said.

The New Jersey State Chamber of Commerce said it opposes the union-backed measure "because it prohibits trucking companies from continuing a pre-established relationship with independent owner-operators through a federal lease and could potentially drive up the cost of goods throughout New Jersey."

The legislation applies to drivers of small package delivery vehicles and operators of drayage trucks, which are defined as trucks that weigh more than 33,000 pounds and operate on or pass through port or intermodal rail yard property to load, unload, or transport cargo.

The bill provides that parcel delivery and drayage truck drivers may not be classified as independent contractors unless the firm using their services can establish to the satisfaction of the New Jersey Department of Labor and Workforce Development that the drivers are free from the day-to-day control or direction of the firm, that the service they provide is outside the firm's usual course or place of business, and that the driver is customarily engaged in an independent trade or occupation.

A firm that misclassifies a driver and fails to pay wages, benefits, or taxes required for employees under various state laws would be subject to a fine of up to $1,000 and/or up to 90 days in prison for each week an employee is misclassified.

Intentional misclassification of these workers would be punishable by a fine of up to $15,000 and imprisonment up to one year for the first violation. The penalties would double for subsequent willful violations.

The penalties are the same as those imposed under the state's Construction Industry Independent Contractors Act. The measure also prohibits retaliation against any worker who files a complaint or reports suspected violations.