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New Jersey Employment Lawyers > Blog > Employment Law > New Jersey Regulators Put Stop Work Order in Place Against Construction Company that Misclassified Workers

New Jersey Regulators Put Stop Work Order in Place Against Construction Company that Misclassified Workers

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On March 4th, 2025, the New Jersey Department of Labor & Workforce Development announced that a stop work order has been placed against a construction company on the grounds that it misclassified workers. Imperio Castillo Construction Corporation allegedly misclassified nine workers. In this article, our New Jersey employment attorney provides a more comprehensive overview of the enforcement action, including an explanation of the worker classification rules.

Enforcement Action: Contractor Require to Stop Project in Princeton, New Jersey 

As confirmed by state regulators, Imperio Castillo Construction Corporation was hired by another construction company to perform a job at a worksite in Princeton. However, a stop work order has been put in place for alleged wage and hour violations. Specifically, the subcontractor faces the following allegations from the New Jersey regulators:

  • Improper classification of construction workers;
  • Failure to properly classify employees; and
  • Failure to maintain adequate records.

No official finding has been made yet. A hearing date has not yet been set. 

What to Know About Worker Classification Requirements in New Jersey 

Employers in New Jersey have an obligation to properly classify their workforce. Classification matters. It has big implications for workers. Indeed, a worker’s rights are largely tied to their status as an employee instead of an independent contractor. Here are key points to know about worker classification requirements in New Jersey:

  • New Jersey Uses the ABC Test for Worker Classification: Similar to many other jurisdictions, New Jersey applies the ABC test to determine whether a worker is an employee or an independent contractor. Under this test, a worker is presumed to be an employee unless the employer can prove: (A) the worker is free from control or direction over their performance, (B) the work performed is outside the usual course of the business, the worker is customarily engaged in an independent trade.
  • Worker Misclassification Can Lead to Severe Penalties: Employers that misclassify workers may face fines, back taxes, and legal claims. The New Jersey Department of Labor and Workforce Development (NJDOL) actively investigates misclassification cases, and penalties can include unpaid wages, benefits, workers’ compensation coverage, and unemployment insurance.

 The Bottom Line: Employers in the construction industry in New Jersey cannot simply decide whether or not a worker is an employee or an independent contractor. There are very specific legal requirements that must be satisfied before any construction worker can be labelled an independent contractor. Unless they are free from direct control and have their own established independent trade, they should be classified as employees.

Speak to Our New Jersey Employment Attorney Today

At Poulos LoPiccolo PC, our New Jersey employment attorney provides solutions-forward advocacy to clients. If you have any questions or concerns about worker classification in the construction industry, our team is here to help. If you have any questions about worker misclassification, please do not hesitate to contact us today for a confidential case review. We provide employment law representation to workers throughout New Jersey.

Source:

nj.gov/labor/lwdhome/press/2025/20250304_stopwork_fairlawn.shtml

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