At a Glance
- New Jersey DOL issued final rule implementing the "ABC" test for assessing whether workers are employees or independent contractors under state law.
- The final rule scaled back or deleted some of the provisions to which the business community objected, but left much of the proposed ABC test intact.
After more than a year’s delay, the New Jersey Department of Labor announced a final rule implementing the state’s “ABC” test. The ABC test is used to determine a worker's status as either an employee or as an independent contractor under multiple laws, including New Jersey’s wage-and-hour laws. After the Department first proposed the rule last year, it received hundreds of comments expressing concern about the rule’s breadth. In response, the final rule scales back many of the proposed rule’s most controversial features, including “examples” that would have singled out companies in certain industries. The final rule also takes a softer approach to issues like legal compliance. Whereas the proposed rule would have treated precautions a business takes to comply with other laws as evidence of the business's “control” over the worker, the final rule takes the opposite approach: legal compliance is not evidence of control.
In all, the final rule is narrower than the original proposal. It responds to vigorous criticism by the business community by removing many of the proposal’s most concerning features. And while it is by no means simple, it takes a lighter approach...
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