At a Glance

• NJ’s Department of Labor and Workforce Development issued proposed regulations interpreting the “ABC test” used to determine independent contractor status.
• If adopted in their current form, these regulations will change the way many employers in New Jersey operate, as the proposed regulations expand prior case law and include certain provisions that directly affect companies who use independent contractors.

On April 28, 2025, the New Jersey Department of Labor and Workforce Development (NJDOL) issued a press release announcing the publication of proposed regulations interpreting the “ABC test” used to determine whether workers are deemed employees or independent contractors under the wage and hour and benefits laws in New Jersey. While the NJDOL advised that these proposed regulations were based on case law from the New Jersey courts interpreting the ABC test,¹ the proposed regulations appear to expand the ABC test and common law on the issue. These proposed regulations represent the next step by the NJDOL targeting misclassification in New Jersey, a goal of Governor Phil Murphy.

Since taking office in 2018, Governor Murphy has created a Task Force on Misclassification and issued two significant packages of laws related to misclassification. These laws include the ability of the NJDOL to issue stop-work orders and assess significant misclassification penalties arising from any violations of state wage, benefit or tax law premised on misclassification. This...

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