A New Jersey Department of Labor rule proposal to codify the test for independent contractor classification in New Jersey would harm workers, public safety, businesses and the state’s economy, the N.J. Business & Industry Association said in comments submitted to the DOL this week.
NJBIA VP of Government Affairs Elissa Frank also said the NJDOL proposal, which has already been formally opposed by nearly Trenton 20 lawmakers from both sides of the aisle, should be withdrawn from consideration because it mischaracterizes and conflicts with existing law.
“The proposed rule is legally flawed, economically unsound, procedurally deficient, and socially regressive,” Frank said. “It upends settled law, contradicts federal standards, and undermines flexible work opportunities in a misguided attempt to expand employment classifications.
“We urge the Department to withdraw this rulemaking and engage in a more transparent, balanced, and evidence-driven process that supports both worker protections and economic freedom.”
Under New Jersey state law, businesses must use a three-prong “ABC test” to determine a gig worker versus an employee.
In her comments, Frank detailed the following for each prong in the NJDOL proposal:
- Prong A is redefined to treat basic compliance and safety practices as evidence of control, including the use of digital platforms, location tracking for customer transparency, or ensuring insurance coverage. These are standard, often legally required, business practices — not indicia of employer-employee control.
- Prong B is artificially narrowed by redefining “places of business” to include a worker’s own vehicle when used in transportation services. This reinterpretation effectively eliminates a key avenue of independent work under current New Jersey law and contradicts the Third Circuit’s prior holding that New Jersey’s test remained lawful precisely because it left this option open.
- Prong C is restricted by declaring that hallmarks of independent work—such as professional licensure, servicing multiple clients, or receiving a 1099 form—are “irrelevant.” This approach minimizes real-world evidence of independence in favor of a presumption of employment.
“These changes are not codification, as the Department asserts, they are transformation,” Frank said.
“By reframing routine practices and markers of autonomy as insufficient or irrelevant, the Department’s proposal effectively flips the ABC test into an ‘employment presumption’ standard, which is inconsistent with New Jersey’s judicial precedents.”
Written comments on the NJDOL rule proposal are due today.
In a public hearing last month, an overwhelming majority of workers and businesses testified against the rule.
Thus far, the following lawmakers from both sides of the aisle have also formally opposed the rule proposal and urged NJDOL to take the proposal off the table:
Frank also added that the proposed rule would lead to job losses in the state and also said it would “disproportionately harm the very groups it purports to help.”
“Women, caregivers, racial minorities, immigrants, and people with prior justice system involvement disproportionately rely on flexible, independent work,” she said. “Eliminating these options will reduce — not enhance — their economic inclusion.”
