Cannons and Cockroaches
In 2019, the Murphy administration claimed 10% to 30% of employers misclassified at least one employee. Years later, the number of stop-work orders suggests it's far less.
Back in 2019, the Report of Gov. Murphy’s Task Force on Employee Misclassification—beneath the subhead “The Extent of Misclassification and its Impact”—gave a specific spread when detailing the scope of the problem:
“Federal studies and state-level agency audits, along with unemployment insurance and workers’ compensation data, indicate that between 10 and 30 percent of employers misclassify at least one employee as an independent contractor.”
The State of New Jersey has more than a million registered businesses. If 10% of those businesses misclassified at least one independent contractor who should have been considered an employee, then it would mean at least 100,000 businesses were part of the problem.
In January 2020, after the task force report with that 10% to 30% claim was issued, Governor Murphy signed a bill into law that gave the Labor Commissioner the power to issue stop-work orders against problematic businesses. That bill was part of what the administration called a “sweeping legislative package to combat worker misclassification and exploitation.”
The press release back then stated:
“The bills will crack down on employee misclassification in businesses by allowing stop-work orders against employers violating state wage, benefit, and tax law; providing assessment of penalties for violations in connection with misclassification of employees; and requiring employers to post a notice for their employees regarding employee misclassification, among others.”
Years later, the results of that strategy have just been announced. We now know how many stop-work orders the Department of Labor & Workforce Development issued to businesses.
As it turns out, it was nowhere near 100,000 businesses.
On December 23, 2025, the Labor Department issued a press release highlighting what it called a “landmark era” under the Murphy administration. This release states that throughout the course of the administration:
“NJDOL created new oversight units, issued over 200 stop-work orders across multiple industries, and secured major settlements that returned tens of millions of dollars to workers.”
These 200 or so stop-work orders, according to a Labor Department press release about misclassification in July 2025, were in addition to about 90 more that it threatened to issue:
“A large part of this success is due to expanded Stop-Work Order authority, with about 200 issued since 2019, helping to prevent employers from continuing to operate while violating their employees’ rights. In addition, 90 notices of intent to issue a stop-work order have been delivered to employers, resulting in an immediate resolution and payment to workers.”
This means that all said and done, according to the Labor Department, perhaps 300 businesses faced stop-work actions during the entirety of the Murphy administration.
That’s less than 1% of all registered businesses in New Jersey—and yet another data point that suggests the problem of misclassification is not nearly as widespread as the Murphy administration has long claimed.
“Only 1-4%”
This result from New Jersey’s Labor Department is actually right in line with what economists at the Mercatus Center wrote in their public comment filed against the Labor Department’s proposed independent-contractor rule.
You can read that seven-page Mercatus Center public comment in full here:
The following bit argues largely the same thing that New Jersey’s own Labor Department just demonstrated after years of policy implementation. The Mercatus Center economists wrote:
“Critically, state audit reports using random sampling methods—which provide the most statistically representative estimates—consistently find that only 1–4% of workers across all industries are misclassified. This means 95–99% of independent contractor relationships are legitimate and properly classified.”
Think about that, and about the Labor Department’s results with stop-work orders, in the context of other information that’s now documented in New Jersey:
The Murphy administration’s claims about “billions” and “hundreds of millions” of dollars being lost to misclassification have been unrealized
Precious few public comments were filed in support of the proposed independent-contractor rule at all, and a bunch of them are based on questionable research, as I detailed here and here and here and here and here
Key research and data in the Report of Gov. Murphy’s Task Force on Employee Misclassification is mischaracterized, creating the impression of a widespread problem that the underlying research doesn’t actually support
Taken together, all these examples demonstrate a pattern of exaggerating the scope of the misclassification problem.
Yes, We Said It Years Ago
I’ve never heard anybody say that zero misclassification happens. Nobody is arguing that. Everyone agrees that bad-actor companies should be held accountable, and that it’s good when misclassified employees receive help.
However, quite a lot of us have been saying for years now that it’s wrong to restrict all kinds of independent contractors, because most independent contractors aren’t misclassified in the first place.
As a writer from California told The New York Times a half dozen years ago, what’s happening with this kind of policymaking is like “killing cockroaches with a cannon.”
All the data that has been released, including the most recent information about stop-work orders, takes us right back to the question the New Jersey Chamber of Commerce asked in 2019. That’s when independent contractors packed the State House in Trenton and urged legislators to stop threatening our livelihoods with legislation inspired by California’s disastrous freelance-busting law.
The New Jersey Chamber’s president, after listening to more than four hours of testimony that day, wisely asked this question:
“Why are we spending so much time on this bill? There is no groundswell I am aware of that suggests this bill is addressing a significant problem in our state.”
That’s still a valid question today. The only groundswell we continue to see is a groundswell of opposition to freelance busting—with about 9,500 written public comments now on file and 99% of them opposed to the Labor Department’s proposed independent-contractor rulemaking.
Everybody is fine with killing the cockroaches. But an increasing number of us are beyond frustrated about being treated like cannon fodder.