By: Amy Rudley, Esq.
New Jersey Independent Contractor Misclassification | ABC Test New Jersey | Employee vs Independent Contractor
New Jersey has confirmed, once again, that misclassifying employees and independent contractors will result in significant issues for employers. You should always err on the side of caution when it comes to your staffing. Unless you can prove otherwise, your employees are employees and not independent contractors.
On October 1, 2026, New Jersey Department of Labor and Workforce Development will implement regulations formally codifying its interpretation of the state’s independent contractor classification standard. This codification of the ABC test illustrates how serious our current Government is about employee misclassification. Under the ABC test, you must establish that your “independent contractor” is not subject to your company’s control, is performing work outside the work usually performed by your company, and is engaged in a trade, profession, or business of their own.
When your business is investigated for misclassification, you will need proof in support of these three factors. The default should always be to assume that your employees are employees. While the law has not changed, this codification of the law is an important reminder that enforcement will be increasing. If you have employees who insist on misclassification due to the tax benefits to them, know that your company is being put at risk because of this arrangement.
The Employment Law attorneys at Cooper Levenson counsel employers on workforce classification, wage-and-hour compliance, internal audits, and proactive risk management. As October 1 approaches, a proactive review today may help avoid costly disputes tomorrow.
Amy Rudley is an attorney in Cooper Levenson’s Employment Law Practice. She concentrates her practice on employment law, hospitality and casino law, and defense litigation, including civil rights and premises liability matters. Amy may be reached at 609-572-7408 or via email at arudley@cooperlevenson.com.
The content of this post should not be construed as legal advice. You should consult a lawyer concerning your particular situation and any specific legal question you may have.