A Busted Flush
Legal Services of New Jersey argues in its public comment that a plumber isn't in a law firm's usual course of business, but a landscaper very well may be.
I’ve now written about 19 of the 26 written public comments filed in support of the proposed independent-contractor rule at the New Jersey Department of Labor & Workforce Development:
The New Jersey AFL-CIO comment, which cannot distinguish between somebody holding down six part-time jobs with six bosses, and a six-figure freelancer doing projects for six different clients.
The Amalgamated Transit Union comment, which alleges that microtransit companies often misclassify workers, but fails to cite any evidence.
The Dēmos comment, which primarily documents a problem of illegal immigration in the State of Texas, near the U.S.-Mexico border.
The Economic Policy institute comment, which includes research based on a bunch of estimates by the think tank, which itself is chaired by the head of the AFL-CIO.
The Engineers Labor-Employer Cooperative comment, which calls misclassification “a serious issue facing the construction industry,” but fails to offer any examples.
The Human Rights Watch comment, which cites an investigation based on interviews with an average of about seven people in each of 13 states, and none of them in New Jersey.
An individual comment that says the submitter agrees with Human Rights Watch.
Another individual comment that says the submitter agrees with Human Rights Watch.
The International Union of Painters & Allied Trades comment, which cites two sources for what it calls the “common” problem of misclassification. One source is a study whose author wrote that it’s hard to accurately measure the prevalence and severity of misclassification, while the other source is congressional testimony given 15 years ago that is based on data as old as 1984.
The New Jersey Association for Justice comment, which urges the Labor Department to move forward with its rule-making in part because of the way the mob infiltrated the Teamsters union in the 1970s.
Make the Road New Jersey’s comment, which urges rule-making that targets all kinds of independent contractors while citing Amazon dozens of times.
The National Employment Law Project comment, which cites Economic Policy Institute research; data from research done in Washington, D.C., and California; data based on a study of just 288 gig workers; and data as old as 1984.
The Public Justice Center comment, which urges New Jersey’s Labor Department to proceed based on things that allegedly happened to five people in the State of Maryland.
The Teamsters union comment, which includes an anecdote that alleges misclassification with no supporting evidence, and which cites research that is 20 years old.
The United Food & Commercial Workers International Union comment, which details a business-model shift the union doesn’t like, but fails to offer any evidence of misclassification.
The Workplace Justice Lab comment filed by Jake Barnes and…
The largely identical Workplace Justice Lab comment filed by Melanie Stratton Lopez, both of which cite a union-backed study whose methodology cannot definitively tell the difference between misclassification and off-the-books illegal schemes; and which cite a study by the Workplace Justice Lab whose findings appear to contradict the Workplace Justice Lab public comments.
The New Jersey State Building & Construction Trades Council comment, which urges the Labor Department to proceed with rule-making that targets an estimated 1.7 million independent contractors based largely on examples of three bad-actor construction companies that affected a total of 34 people.
The Coalition for Healthy Ports NY/NJ comment, whose top-line arguments cite a 2011 New Jersey Labor Department case that involved a single company, and a 2012 case that involved a single trucker.
Today, I’m going to focus on the last of the 26 supportive comments that were filed by organizations, as opposed to individuals.
Here is the four-page public comment from Legal Services of New Jersey, which is a multimillion-dollar nonprofit based in Edison, N.J.:
This comment is signed by what appear to be three different entities: Legal Services of New Jersey itself; Keith Talbot, as chief attorney for the Farmworker Project; and Sarah Hymowitz, as chief attorney for the Workers Legal Rights Project.
But according to this 2006 New York Times story about illegal immigrants, the Farmworker Project is actually run by Legal Services of New Jersey. Talbot’s LinkedIn profile also says he’s employed by Legal Services of New Jersey. Similarly, Hymowitz’s LinkedIn profile suggests that the Workers Legal Rights Project is part of Legal Services of New Jersey. Talbot and Hymowitz are both listed in this 2017 program honoring people who have worked many years with Legal Services of New Jersey.
These attorneys make one of the most head-scratching arguments I’ve seen, at least in terms of what I think of as basic common sense.
Their argument boils down to the idea that a landscaper doing this kind of work once a week for a law firm …
… and attorneys doing this type of work at that same law firm …
… may not be different at all for the purposes of determining who is an employee and who is an independent contractor.
Overgrown Lawns vs. Clogged Toilets
For the record, I am not an attorney.
With that said, to follow these attorneys’ argument about the landscapers, you need to understand one simple thing in layman’s terms: The rule that New Jersey’s Labor Department proposed includes an interpretation of what it means for someone to be doing work that is within a company’s usual course of business.
Legal Services of New Jersey, in its public comment, states that it wants to see different descriptions of what constitutes the usual course of business.
In making this argument, the public comment calls out the following section of the Labor Department’s proposed rule and asks for it to be changed:
Legal Services of New Jersey wrote:
“LSNJ requests that the agency modify examples 1 and 3. In our experience, wage violations are common among the landscaping and janitorial service industries. It would be better for the agency to point to examples of plumbers and electricians so as not to suggest that these particularly vulnerable workers are precluded from the protections inherent in an employee-employer relationship. Janitors and landscapers may be used regularly and be within the usual course of business for employers. …
“Plumbers and electricians are better examples of work that is ‘outside the usual course of business.’ This is true since the skill set of the work is not within the scope of most businesses. Their work can also be anticipated to be infrequent. In contrast, the work of janitors and landscapers may involve the regular, weekly work of the core interest of the business in being clean and having presentable premises. Therefore, the use of the janitorial and landscaping examples incorrectly describes their work, which may be within the usual course of business.”
Again, I’m not a lawyer, but it sure seems to me that if you’re calling a plumber because your toilets are overflowing with, well, pretty much anything, then your business is no more clean or presentable than it would be with an overgrown lawn.
Common sense also tells me that if I need an attorney, I shouldn’t call a landscaper. Or vice versa.
Also common sense: It would be awfully hard for any kind of business, landscaper or otherwise, to succeed without repeat clients.
All of which suggest to me, as a layperson, that the argument these attorneys make in this public comment doesn’t pass the smell test.
‘This Seems to Be the Point’
But let’s see what a lawyer who opposes New Jersey’s proposed rulemaking has to say.
Look again at the part of the Labor Department’s proposed rule that this public comment is about:
Note the use of the word typically in the first sentence.
That word is important, according to Elizabeth Milito, vice president and executive director of the Small Business Legal Center at the National Federation of Independent Business.
Milito wrote in the NFIB’s public comment that the proposed New Jersey rule:
“… never commits to saying whether even its own examples are clear-cut cases. In one example, dealing with a cleaning person working at a dentist’s office, the most the rule can muster is that the ‘services performed by the cleaning person are likely outside of the dentist’s usual course of business. … Likewise for the musician playing at a restaurant—it is only ‘likely’ that this is outside of the usual course of business, and even for a landscaper at a law firm, the only certainty we have is that it is ‘likely.’
I asked her to elaborate about this part of her public comment.
She told me this:
“As the saying goes: Almost only counts in horseshoes. In the law, likely counts for nothing. …
“A caddie helping patrons play golf at a country club is ‘likely’ within the usual course of business, but a musician entertaining patrons at a restaurant is ‘likely’ outside of it. Why? The rule provides no rationale. Businesses are left to fill in the blanks themselves. If they can’t figure out the distinction, they will either guess wrong, or refuse to guess, and classify contractors as employees.”
I also asked Milito how it’s possible for any company or independent contractor to follow a rule if the requirements are so vague. Wouldn’t businesses have to reclassify every single independent contractor as an employee to try and comply?
She responded:
“This seems to be the point.”
My conversation with Milito was this past summer, after I had testified before the U.S. Senate HELP Committee. I explained on Capitol Hill that what’s going on in this area of policymaking is not targeting employee misclassification. It’s weaponizing regulatory language to attack independent contractors.
Milito told me:
“Your characterization is spot on. Unfortunately, we continue to see federal and state agencies put limits on independent work through reclassification efforts. Even though an overwhelming number of freelancers say they prefer their current independent work arrangement, there is an ongoing effort from states to limit these work opportunities.”
You can decide for yourself—after seeing what’s in all of these New Jersey public comments—whether you think the proposed rulemaking passes the smell test, or whether it just plain stinks.