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A recent decision by the New Jersey Appellate Division serves as a stark reminder of the hurdles workers can face when seeking protection under the New Jersey Law Against Discrimination (LAD). In Sanger v. Next Level Business Services, Inc., the court affirmed that independent contractors—even those facing egregious allegations of harassment—fall outside the protective umbrella of the LAD.

The plaintiff, Nisha Sanger, was an experienced recruiter who performed services for Cognizant Technology Solutions through an agency agreement with Next Level Business Services (NLB). Her complaint alleged disturbing conduct: inappropriate physical touching by a supervisor and a subsequent “proposition” to engage in sexual relations with a high-level executive to secure her position. When she refused, she was terminated shortly thereafter. However, the court never reached the merits of these harassment and retaliation claims. Instead, the case turned on a single threshold question: Was Ms. Sanger an employee or an independent contractor?
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Many workers are entitled to payment of a minimum wage and extra pay for overtime work. Workers who believe their employers have failed to pay them the correct amount can recover damages in civil lawsuits under New Jersey employment law. If an employer has falsely classified a worker as an independent contractor instead of an employee to avoid minimum wage or overtime, they may be liable to that worker under state law. The New Jersey Department of Labor and Workforce Development (LWD) recently filed a lawsuit against a general contractor and multiple subcontractors involved in a large construction project in Jersey City. The suit alleges wage violations, employee misclassification, and other claims.

New Jersey law currently sets the minimum wage at $15.49 per hour for most employers. This is the minimum rate that must pay to non-exempt workers. Both New Jersey and federal law require time-and-a-half for hours worked over forty in a week; thus, if a non-exempt worker makes $18 per hour and works fifty hours in a week, the employer must pay them $27 per hour for the last ten of those hours worked.

Failure to pay minimum wage and overtime, also known as “wage theft,” may cost workers across the country as much as $50 billion each year. This amount exceeds all other forms of theft, such as burglaries and robberies, combined. Private lawsuits and government regulators only recover a fraction of the amount lost to wage theft.

The public also loses because of wage theft. Worker misclassification alone may cost New Jersey taxpayers around $300 million per year in lost contributions to unemployment insurance, Social Security, Medicare, and income taxes.
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Federal and New Jersey employment laws protect employees and job applicants from disability discrimination. Disability discrimination encompasses refusing to hire or firing someone because of a disability, providing different pay or other forms of compensation due to a disability, or refusing to provide reasonable accommodations that would enable an individual with a disability to perform their job duties. The U.S. Supreme Court recently issued a ruling in a case alleging disability discrimination in compensation, specifically employer-sponsored health insurance, under the Americans with Disabilities Act (ADA) of 1990. The allegedly discriminatory act did not affect the plaintiff until after she had retired. The court ruled that she was no longer an “employee” as defined by the ADA and did not have standing to file a lawsuit.

The ADA states that employers may not “discriminate against a qualified individual on the basis of disability in regard to… employee compensation” and other matters. The statute defines a “qualified individual” as someone who can “perform the essential functions” of a job the person “holds or desires,” either without assistance or with reasonable accommodations. The meaning of the words “holds or desires” was at the center of the Supreme Court case.

The plaintiff in Stanley v. City of Sanford began working as a firefighter for a city fire department in 1999. She was diagnosed with a chronic illness in 2016, and as a result had to retire from the fire department in 2018 after approximately nineteen years on the job.
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Federal and New Jersey employment laws protect workers’ rights to organize and advocate for themselves. The National Labor Relations Act (NLRA) provides procedures for workers to decide whether to join or form a union and to elect representatives who may engage in collective bargaining with their employer. Once the employees have chosen a union to represent them, their employer must notify the union about certain employment decisions and give the union an opportunity to negotiate. Included in these employment decisions are decisions related to employee compensation. The Third Circuit Court of Appeals recently ruled that a New Jersey nursing home violated the NLRA by reducing bonus payments during the COVID-19 pandemic without notifying the employees’ union representatives.

Section 8(a) of the NLRA identifies “unfair labor practices by employer[s].” These include:
· Interfering with the rights guaranteed by § 7 of the statute, such as employees’ right “to bargain collectively through representatives of their own choosing”; and
· Refusing to participate in collective bargaining with the employees’ lawfully elected representatives.
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For employees who earn commissions, a recent decision by the New Jersey Supreme Court has provided crucial clarity and protection. In the case of Musker v. Suuchi, Inc., the state’s highest court unequivocally held that commissions earned for labor or services rendered are indeed “wages” under the New Jersey Wage Payment Law (“WPL”). This ruling overturns a prior Appellate Division decision and reinforces the broad protections afforded to employees under the WPL.

The Backstory: Commissions on PPE Sales Sparks Legal Battle
The case arose when Rosalyn Musker, a sales employee of Suuchi, Inc., sought commissions for her sales of personal protective equipment (PPE) during the COVID-19 pandemic. After Musker successfully generated significant revenue through these sales, a dispute arose regarding the amount of commission she was owed and whether these commissions qualified as “wages” under the WPL.

The trial court initially sided with the employer, arguing that the PPE commissions were “supplementary incentives” designed to motivate Musker beyond her regular duties and were therefore excluded from the WPL’s definition of wages. The Appellate Division affirmed this decision.
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New Jersey Employees have a vast array of rights thanks to the state’s expansive employment laws. The New Jersey State Wage and Hour Law (WHL), for example, requires employers to pay a minimum wage and overtime to non-exempt employees. Independent contractors are not entitled to these types of protections, and thus employers sometimes try to falsely classify workers as such. New Jersey takes employee misclassification very seriously and grants employees the right to bring civil lawsuits to recover unpaid wages and other damages. In addition, the Department of Labor and Workforce Development (LWD) frequently pursues administrative enforcement actions. Employers in the construction industry could even face criminal penalties for misclassifying employees as independent contractors.

The WHL and other laws allow employees to sue for misclassification. New Jersey has two statutes that impose administrative penalties and other consequences on employers that misclassify workers:

  1. A law passed by the state legislature in 2019 that establishes administrative penalties for most employers in the state; and
  2. The Construction Industry Independent Contractor Act (CIICA), passed in 2007, which imposes criminal penalties on supervisors, managers, or other individuals who misclassify construction workers. The severity of the penalties depends on the circumstances.

The 2019 misclassification law does not define the terms “employee” or “independent contractor.” New Jersey courts have adopted the “ABC test” to determine whether a worker should be classified as an independent contractor or employee. This test is favorable to employees and requires the employer to meet strict criteria in order to classify a worker as an independent contractor. The LWD has proposed adopting the ABC test in all its misclassification cases. The CIICA already includes the ABC test in its definition of “employee.”
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Laws that protect workers from employment practices like discrimination or wage violations are not very helpful if people fear losing their jobs or facing other consequences for coming forward. For this reason, federal and New Jersey employment laws prohibit retaliation for various protected actions, including opposing suspected unlawful policies or practices and cooperating with government regulators. Employers who retaliate against employees for engaging in protected activities may be liable for damages. The New Jersey Attorney General’s Division on Civil Rights (DCR) recently issued a Finding of Probable Cause in a case alleging numerous violations of the New Jersey Law Against Discrimination (NJLAD). This is a relatively early stage in the administrative process and is not the same as a verdict finding an employer liable for violating the NJLAD, but if an employer cannot reach a settlement with the DCR after a Finding of Probable Cause, an administrative prosecution may follow.

Section 11(d) of the NJLAD, found at N.J. Rev. Stat. § 10:5-12(d), makes it an “unlawful employment practice” for an employer to “take reprisals against any person” because of certain actions. These actions include:
– Filing a legal complaint alleging NJLAD violations;
– Providing testimony or other assistance in a legal proceeding brought under the NJLAD;
– Seeking legal advice about rights under the NJLAD; and
– Stating one’s opposition to acts that one believes violate the NJLAD.

The NJLAD’s anti-discrimination provisions cover much more than employment discrimination. They also cover discrimination in housing, mortgage lending, consumer credit, banking, and public accommodations. The statute’s anti-retaliation provisions apply broadly to people who oppose any type of discrimination it addresses. In 2010, the New Jersey Supreme Court affirmed a broad view of the NJLAD’s protections against retaliation. It stated in its ruling that the NJLAD’s purpose is both “to fight discrimination wherever it is found…[and] to protect those who assist in rooting it out.”
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Employees are entitled to pay for the work they perform for their employers. An employer that fails to pay an employee what they have earned could face significant penalties under New Jersey employment law. The New Jersey Wage Payment Law (NJWPL) imposes civil penalties on employers for violating its provisions. Employees may also bring civil lawsuits under the NJWPL to recover the amount of pay their employers owe them, plus additional liquidated damages. The wage law defines “wages” to include numerous forms of payment. The New Jersey Supreme Court recently ruled in favor of an employee in a claim under the NJWPL. The dispute involved whether commissions based on performance count as “wages” when an employee also receives a base salary. The court’s ruling provides an employee-friendly definition of “wages.”

The NJWPL defines “wages” as money paid to an employee for their “labor or services…on a time, task, piece, or commission basis.” It excludes “supplementary incentives and bonuses” that are not part of an employee’s “regular wages.”

Employers must pay wages at least twice a month for most employees. Each payment must be for the full amount the employee has earned up to that point, with exceptions for certain withholdings like payroll taxes, health insurance premiums, and retirement plan contributions. An employee can file suit to recover unpaid wages. The NJWPL allows them to claim 200 percent of the amount owed as liquidated damages, plus attorney’s fees and court costs.
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The Resnick Law Group’s founding partner, Gerald Jay Resnick, argued the pivotal case of Richter v. Oakland Board of Education before the New Jersey Supreme Court in September 2020. This landmark decision unanimously expanded the rights of employees who are disabled and face denial of a workplace accommodation . On November 20, 2025, Mr. Resnick will be giving a featured presentation at the upcoming New Jersey Association for Justice Meadowlands Seminar® 2025, where he will discuss the far-reaching impact of the decision effecting employees and employers across the state.

The Significance of Richter for New Jersey Employees
The Richter decision clarified two critical points under the New Jersey Law Against Discrimination (LAD). First, the Court held that an employee does not need to show an adverse employment action (like being fired or demoted) to bring a failure to accommodate claim. The New Jersey Supreme Court made it clear that the failure to provide a reasonable accommodation can be an actionable harm. The Court’s opinion powerfully recognizes the harm done to disabled employees who are not accommodated and forced to work in pain or under difficult conditions. It affirmed that the LAD protects workers who are compelled to “soldier on” without the accommodations to which they are legally entitled. This precedent ensures that workers can seek justice without having to wait until they are fired or face other retaliatory measures.
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Employers’ use of artificial intelligence (AI) in hiring and other employment matters has raised concerns about how the technology may perpetuate discrimination in their processes. New Jersey and federal employment laws prohibit employment discrimination based on factors such as race, sex, disability, and age, among others. Recently, New Jersey has determined that these legal protections may make employers liable for discrimination resulting from AI technology. The New Jersey Attorney General (AG) and the Division of Civil Rights (DCR) issued guidance in January 2025 regarding “algorithmic discrimination” by employers using AI tools to aid in employment decisions.

While New Jersey does not yet have any laws that directly address the use of AI in hiring decisions, there is a proposed bill pending that would regulate the use of “automated employment decision tools.” This term refers to software that uses AI models to screen job applicants and identify candidates considered preferable for a position. Although that may seem harmless on its face, there is a problem: AI doesn’t think. Its responses are based on the prompts it is given by the user and are representative of the data on which it is trained, which may reflect historical institutional and systematic inequities. Therefore, if a machine learning application is told to weed out certain applicants based on a protected category, or is trained on biased data, it could result in biased recommendations.

The New Jersey AG and the DCR has launched a Civil Rights and Technology Initiative to review the risks of employment discrimination in AI tools.

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