NJDOL Imposes Stop-Work Order on Kismet International for Misclassifying Drivers

On May 20, 2026, the New Jersey Department of Labor and Workforce Development (NJDOL) took decisive action by issuing a stop-work order against Kismet International Inc., a Teaneck-based limousine and taxi service. This order stems from an extensive audit covering the years 2012 through 2015, which revealed that Kismet misclassified 80 drivers as independent contractors rather than employees. This misclassification led to significant unpaid contributions to the state’s Unemployment Compensation Fund and Disability Benefit Fund, totaling more than $207,000.

The audit concluded that the company had failed to comply with state labor laws, specifically the Unemployment Compensation Law (UCL). This regulatory discovery underscores a growing trend of rigorous enforcement from NJDOL, aiming to ensure compliance and protect workers within New Jersey’s transportation sector. Given the importance of proper worker classification, this enforcement action signals a clear warning to other companies in the industry that noncompliance could result in severe financial repercussions, including hefty fines and operational shutdowns.

In the case of Kismet, the company challenged the findings through legal proceedings, but the New Jersey Superior Court upheld the NJDOL’s conclusions. This decision highlights the judiciary's support for enforcing labor compliance and signals the importance of adhering to worker classification standards. Companies involved in labor-intensive sectors such as transportation should be vigilant and proactive in ensuring they classify workers correctly to avoid similar fates. Misclassifying employees can lead to not only substantial liabilities, such as this case's $207,358.81 outstanding balance, but also jeopardizes future contract eligibility and compliance with state procurement requirements.

Moreover, this incident marks part of a broader trend, as the NJDOL has issued numerous stop-work orders and compliance notifications, aiming to recover millions in outstanding liabilities. The agency has implemented 123 notices and nine stop-work orders, recovering approximately $2.3 million as a result. The proactive measures taken reflect the NJDOL's commitment to worker protection and compliance enforcement, which are crucial elements for companies engaged in public contracts and services that leverage labor.

Procurement professionals and contractors may need to reassess their labor practices and policies to remain compliant with evolving standards. The repercussions of failing to do so include the potential for operational disruptions due to enforced stop-work orders, heightened scrutiny during audits, and substantial financial liabilities that can threaten business viability. Given NJDOL’s stringent enforcement actions, businesses in the transportation and other labor-intensive sectors should prioritize compliance initiatives to mitigate risks associated with worker classification.

In summary, Kismet International Inc.'s situation is a crucial lesson for other contractors. Following NJDOL's example, companies must be cautious and ensure their workforce classifications are consistent with state regulations. Moreover, continual audits, regular training for HR departments, and investment in legal counsel specializing in labor laws can help prevent violations and protect against potentially devastating penalties.

By staying informed and compliant, businesses can foster not only a fair work environment but also secure their positions as reliable contractors within the government procurement landscape.

• NJDOL issued a stop-work order against Kismet International for misclassifying 80 drivers.
• Kismet faces a total outstanding balance of $207,358.81.
• Increased regulatory scrutiny in New Jersey's transportation sector highlights labor compliance needs.
• Misclassification can lead to disruption of operations and increase financial liabilities for businesses.
• NJDOL has recovered approximately $2.3 million through its audit and enforcement actions.
• Companies must ensure proper classification to maintain compliance with state procurement standards.