New Jersey may adopt new worker-friendly regulations for determining whether a worker is an independent contractor or employee that could make it very difficult for businesses to demonstrate that workers are independent contractors and open the door to additional liability for misclassification.

Quick Hits

• New Jersey will consider new regulations that could significantly limit the classification of workers as independent contractors by clarifying the state’s “ABC test” for determining employment status.
• The proposed rules aim to define the control, independence, and business engagement of workers, raising concerns among business groups about increased liability for misclassification.
• The proposed regulations will have a sixty-day public comment period, which began on May 5, 2025.

On April 28, 2025, the New Jersey Department of Labor and Workforce Development (NJDOL) unveiled a notice of proposal for new rules under N.J.A.C. 12:11 to clarify the application of the state’s “ABC test” for determining independent contractor status. The notice was formally published in the New Jersey Register on May 5, 2025, kicking off a sixty-day public comment period.

The NJDOL’s new proposed rules aim to codify the interpretation of the ABC test by the Supreme Court of New Jersey in multiple decisions concerning the test’s prongs. The three-prong test is used to determine if a worker is an employee or an independent contractor under various New Jersey laws, including the Unemployment...

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