• Skip to primary navigation
  • Skip to main content

HRMorning

  • FREE RESOURCES
  • PREMIUM CONTENT
  • HR DEEP DIVES
  • PODCASTS
    • VOICES OF HR
    • WOMEN’S LEADERSHIP TODAY
  • LOGIN
  • SIGN UP FREE
  • Employment Law
  • Benefits
  • Recruiting
  • HR Technology
  • Payroll
  • Management
  • Women’s Leadership
  • More
    • Talent Management
    • Performance Management
    • Leadership & Strategy
    • Compensation
    • Policy & Procedures
    • Wellness
    • Staff Departure
    • HR Career & Self-Care
    • Health Care
    • Retirement Plans
  • Employment Law

Driver Misclassification Settlement Includes $2.2M for Back Wages

Carol Warner
By: Carol Warner
  • Share on

About the Author

For nearly two decades, Carol Warner has analyzed the legal and financial realities behind workplace decisions, covering employment law, benefits, payroll and HR technology. She translates complex legal updates, regulatory shifts and vendor claims into plain language that HR teams can act on. Her focus is simple: What does this mean for employers, and what should they do next? Connect with her on LinkedIn.

Show Less
Last Updated: September 10, 2026
3 minute engagement
Spotlight on worker misclassification graphic featuring books, documents, an award badge, and icons representing communication and financial elements. Highlights risks and compliance challenges related to employee classification for HR professionals.

New Jersey has reached an employee misclassification settlement with STG Logistics over allegations that the company and its predecessor misclassified hundreds of truck drivers as independent contractors.

New Owner Assumed Liability

In 2019, the New Jersey Department of Labor and Workforce Development (NJDOL) began investigating XPO Logistics’ Newark intermodal operations. STG Logistics acquired XPO’s New Jersey intermodal business in 2022 and assumed liability for certain past employment practices, according to the state’s lawsuit against STG.

The NJDOL’s investigation alleged STG:

  • Failed to pay all wages due
  • Made unlawful deductions for fuel, tolls, parking, liability insurance, fees, and truck maintenance and repairs
  • Made deductions that, in some pay periods, exceeded drivers’ gross pay and resulted in negative net pay
  • Failed to maintain required records of hours worked and wages paid
  • Failed to provide and pay earned sick leave
  • Failed to maintain sufficient workers’ compensation coverage, and
  • Failed to make required contributions to New Jersey’s unemployment compensation and state disability benefits funds.

Employee Misclassification and State Law

Under New Jersey’s ABC test, workers are presumed to be employees unless a business can prove that the individual is largely free from the company’s control, performs work outside the company’s usual business or outside its places of business and has an independent business. NJDOL alleged that STG couldn’t satisfy any of the three prongs and that the drivers therefore were employees, not independent contractors. 

Specifically, the NJDOL said the companies exercised significant control over the drivers and their work, including by:

  • Requiring that the company’s name appear on drivers’ trucks
  • Requiring drivers to lease their trucks to the company for its exclusive possession, control and use
  • Prohibiting drivers from using the trucks for other work without written consent
  • Requiring drivers to sign non-negotiable “independent contractor agreements”
  • Requiring installation of GPS tracking devices in drivers’ trucks, and
  • Assigning all routes, tightly monitoring deliveries and setting pay rates.

NJDOL alleged that, because the drivers should’ve been treated as employees, they were entitled to wage protections and employment-related benefits, including minimum wage and overtime, workers’ compensation, unemployment insurance, temporary disability benefits, earned sick leave, job-protected family leave and equal pay protections.

Bankruptcy Limits Immediate Recovery

STG filed Chapter 11, and the settlement lists a gross value of $80.912 million, but only $2.775 million is designated as priority claims. That amount includes $2.22 million in unpaid wage claims for eligible drivers and $555,000 to the state for penalties and employment-related fund contributions. 

The remaining $70.637 million is classified as general unsecured claims. The agreement also provides for $7.5 million in suspended liquidated damages if STG violates the agreement.

STG denied the allegations, saying it entered the agreement solely to settle the dispute.

Future Drivers Must Be Treated as Employees

Under the agreement, STG must comply with New Jersey employment laws and treat drivers who perform services in New Jersey under the company’s motor-carrier authority as employees. That requirement applies even if a driver is called an owner-operator or operates through a business entity. STG must also submit periodic reporting to NJDOL through 2028.

More info: NJDOL Settlement Agreement

Filed under
  • Employment Law
  • Share on

Get the HRMorning Newsletter

With HRMorning arriving in your inbox, you will never miss critical stories on labor laws, benefits, retention and onboarding strategies.

  • This field is for validation purposes and should be left unchanged.
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form
  • This field is hidden when viewing the form

Free Training & Resources

Webinars

Automating your HR Processes, without Switching Providers

Webinars

Boost and Maintain Your Learner Engagement

Webinars

The Benefits That Employees Want in 2020

Webinars

Decision Fatigue: How Too Many Choices Disrupt Business

Provided by Paycom

SPONSORED CONTENT

HR Technology

sponsored content
The Best AI Software for HR Automation

Courtesy of G-P

Talent Management

sponsored content
Powerful Employee Retention Strategies for 2025: How to Keep Your Best People

Courtesy of PEOPLEGURU

Benefits

Health Care

Wellness

sponsored content
Proven Results: 5 Ways Teladoc Health Chronic Condition Management Transforms HR Outcomes

Courtesy of TELADOC HEALTH

Further Reading

  • Employment Law
Stroke Leads to Job Termination: FMLA Violation?

A federal court refused to dismiss a lawsuit filed by an employee who was fired after taking FMLA leave to recover from a stroke. The ru...

  • Employment Law
DOL’s New Report: FLSA Mistakes Cost a Whopping $149.9M in FY 2024

As an HR pro, you know that FLSA mistakes can be expensive. But even so, the sky-high cost of noncompliance found in the feds’ latest rep...

  • Employment Law
Race Bias Suit Produces $1.25M Payout: What Happened?

The EEOC announced that an employer it targeted in a race bias suit will pay $1.25 million and take other significant steps to end the liti...

  • Employment Law
Wage Theft Spikes in DC: New Lawsuit Plus 3 Settlements

In recent weeks, the District of Columbia’s Office of the Attorney General (OAG) has been focused on protecting its citizens from wage th...

  • Employment Law
A victory for common sense: Appeals court reverses crazy Title VII ruling

When you think of prohibited sex discrimination under Title VII, what comes to mind? How about a workplace policy that says male employe...

  • Employment Law
FLSA retaliation? Lawsuit against HR, farm outlines gruesome details

The U.S. Department of Labor (DOL) has filed a complaint against a Tennessee farm and its HR manager. The alleged problem: FLSA retaliation...

Get the latest from HRMorning in your inbox PLUS immediately access 10 FREE HR guides.

I WANT MY FREE GUIDES
HR Morning Logo
  • Facebook
  • Linked In
  • ABOUT HRMORNING
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • Performance Management
  • HR Technology
  • Leadership & Strategy
  • Compensation
  • Policy & Procedures
  • Wellness
  • Staff Departure
  • HR Career & Self-Care
  • Health Care
  • Retirement Plans
  • DEI

HRMorning, part of the Rover Insights Network, provides the latest HR and employment law news for HR professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day's headlines, HRMorning delivers actionable insights, helping HR execs understand what HR trends mean to their business.

Powered By Rover Insights
Privacy Policy | Terms of Service
Copyright© 2026 Rover Insights
HRMorning Logo

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

Why do we need your credit card for a free trial?

We ask for your credit card to allow your subscription to continue should you decide to keep your membership beyond the free trial period.  This prevents any interruption of content access.

Your card will not be charged at any point during your 21 day free trial
and you may cancel at any time during your free trial.

During your free trial, you can cancel at any time with a single click on your “Account” page.  It’s that easy.