What You Need to Know

• The New Jersey Department of Labor and Workforce Development (NJDOL) has adopted new regulations impacting the “ABC test” used to determine independent contractor status.
• The regulations, which become effective on October 1, 2026, will apply to New Jersey’s Unemployment Compensation Law, the Wage Payment Law, and the Wage and Hour Law, among other statutes.
• Employers are urged to evaluate their current worker classifications against the prongs of the ABC test to avoid future liability issues or a potential NJDOL audit.

On May 5, 2026, the New Jersey Department of Labor and Workforce Development (NJDOL) adopted new regulations impacting the statutory ABC test for determining whether a worker is classified as an independent contractor or employee. The regulations will be published on June 1, 2026, and will take effect on October 1, 2026.

Under the new regulations, the ABC test will apply to statutes and rules in which the issue of independent contractor status depends on its application, including the New Jersey Unemployment Compensation Law, the New Jersey Wage Payment Law, and the New Jersey Wage and Hour Law. According to the NJDOL, the regulations “synthesize decades of court decisions, including the New Jersey Supreme Court's unanimous ruling in East Bay Drywall, LLC v. Department of Labor (2022), and its landmark decision in Carpet Remnant Warehouse, Inc. v. NJ Department of Labor (1991).”

Under the three-pronged ABC test, the putative employer...

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