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Certified Investigations v. Board of Review

A-6100-97T2 (N.J. Super. App. Div. 1999) (Unpublished)

EMPLOYER-EMPLOYEE; INDEPENDENT CONTRACTORS—An unlicenced investigator engaged by a licensed company, working relatively independently from home, nonetheless was found to be an employee rather than an independent contractor.

Under New Jersey statute, services performed by an individual for pay are deemed to be employment unless: (A) the individual has been or will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and (B) the services are either outside the usual course of business of the “employer” or are performed outside of all places of business of the enterprise; and (C) the individual is customarily engaged in an independently established trade, occupation, profession or business. If any one prong of the test is failed, the person is considered to be an employee. Determinations are fact-sensitive, requiring an evaluation in each case of the substance, not the form, of the relationship. In this case, an enterprise that performed private investigation work hired an individual, trained her as an investigator, and provided her with a business card. Because the individual was not licensed, she could work for any licensed investigation company, but could not work independently as an investigator. The company assigned investigation tasks to her, but very loosely monitored her progress. She was not supplied with a car or any other equipment for her work. She worked from her home, did not report her time and had no routine work schedule. She was reimbursed only for mileage and travel expenses and was paid only when the company got paid. Upon being hired, she signed a contract acknowledging that she was an independent contractor. Despite that relationship, the Department of Labor’s Board of Review found that she failed all three prongs of the test. In its mind, she was not “free from control or direction over the performance” of her services; she performed services that were not “outside the usual course of the employer’s business”; and she was not “customarily engaged in an independently established trade, occupation, or profession or business.” The Court held that there was substantial credible evidence supporting the Board of Review’s reasonable findings and, therefore affirmed those findings.


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