On July 29, 2026, the Office of the New Jersey Attorney General and the New Jersey Department of Labor and Workforce Development announced a $2.775 million settlement with STG Logistics and related entities, resolving allegations that hundreds of truck drivers were improperly classified as independent contractors. The settlement resolved the case of Robert Asaro-Angelo v. STG Logistics, Inc., et. al., the first lawsuit brought under New Jersey’s 2021 amendment to the Misclassification Enforcement Act, which authorizes the State to sue employers in Superior Court for worker misclassification. STG will pay $2.22 million to the previously misclassified drivers and $555,000 to the State for penalties and employment-related contributions. The agreement also provides for an additional $7.5 million penalty if STG violates the settlement.
The STG settlement indicates that New Jersey is taking misclassification seriously, and employers should understand the determination between employee and independent contractor status. Effective October 1, 2026, new NJDOL regulations codify how the Department interprets the three elements of New Jersey’s “ABC Test” and provides factors NJDOL will consider when evaluating each prong of the test. Under the ABC Test a worker is presumed to be an employee unless the employer can establish three statutory requirements: (A) the worker has been and will continue to be free from control or direction over the performance of services, both under the worker’s contract of service and in fact; (B) the work performed is either outside the usual course of the business for which the work is being performed, or the work is performed outside of all the places of business of the enterprise; and (C) the worker is customarily engaged in an independently established trade, occupation, profession or business.
The practical implication for New Jersey businesses is that misclassification can become substantially more expensive than simply paying a worker as an employee from the outset. Under N.J.S.A. 34:1A-1.18, NJDOL may assess penalties of up to $250 per misclassified worker for a first violation and up to $1,000 per worker for subsequent violations, in addition to a penalty of up to 5% of the worker’s gross earnings over the preceding 12 months. Businesses that regularly use contractors—particularly in industries such as trucking, construction, logistics, and other labor-intensive fields—should therefore consider conducting an internal review of their contractor relationships. The critical question is not whether the company has a contract calling someone an “independent contractor,” but whether the day-to-day relationship can satisfy every element of New Jersey’s ABC test. The STG settlement demonstrates that the consequences of getting that question wrong can cost a business millions of dollars.
If your organization would like assistance reviewing internal policies and procedures or preparing for these upcoming changes, the attorneys at Porter Thomas Grabell & Baumwoll P.C. are available to assist you. Please contact us at (201) 569-5959 to schedule a consultation.
