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New Jersey employers face significant financial exposure for misclassifying workers as independent contractors rather than employees. The New Jersey Department of Labor and Workforce Development (NJDOL) recently reached a settlement with STG Logistics Inc., STG Drayage LLC and other subsidiaries (STG), requiring STG to pay at least $2.775 million to resolve claims that it misclassified truck drivers as independent contractors in violation of the state’s wage and hour laws. This settlement follows a lawsuit the NJDOL filed in New Jersey Superior Court, pursuant to a 2021 law that authorizes the state to file suit against employers for employee misclassification.
Under the settlement, $2.22 million will go directly to the misclassified truck drivers, while the remaining $555,000 will go to the state of New Jersey. In the event STG fails to comply with the terms of the settlement agreement, it will owe an additional $7.5 million in penalties to the state.
The STG settlement resolves the first lawsuit filed under New Jersey’s 2021 misclassification law, but it is part of a broader enforcement trend and follows two other recent large settlements with the NJDOL for employee misclassification — a September 2025 settlement with Lyft for more than $19.4 million for the misclassification of over 100,000 drivers as independent contractors and a March 2026 settlement with PDX NorthInc. for $7 million for the misclassification of its delivery drivers as independent contractors.
New Jersey continues to take an aggressive approach against worker misclassification. Employers should review and understand the final regulations effective October 1, 2026, clarifying the application of the ABC test for determining independent contractor classification, and should consult with counsel to assess whether their workers are properly classified.
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