Episode Details

New Jerseys New Independent Contractor Rule: A Strict ABC Test

New Jersey has introduced a stringent independent contractor rule, featuring an ABC test that surpasses many others in the nation. The Department of Labor unveiled this rule last week, solidifying years of court rulings for wage laws. To meet the criteria of a genuine independent contractor, workers must be free from control, perform work outside the companys typical business or locations, and operate their own established trade.

The initial drafts included controversial elements, such as considering a companys adherence to legal compliance as evidence of control under prong A. Additionally, mentions of proprietary apps, like dispatch tools, as indicators of control were removed. The definition of a companys place of business was also narrowed, excluding truck cabs from the equation.

Trucking lawyers are relieved, as these adjustments significantly impact a heavily regulated industry where safety rules are prevalent. One expert noted that the original version could have eliminated most independent contractors statewide. Now, complying with federal regulations does not automatically classify workers as employees.

However, business groups, such as the New Jersey Business and Industry Association, remain unconvinced. They argue that prongs B and C are too rigid, making it nearly impossible to demonstrate independence in various sectors. Possessing a license or multiple clients is insufficient on its own.

These groups are advocating for the state senate and assembly to either repeal the rule or amend it swiftly, potentially with new laws that cater better to the gig economy. The battle over who dictates the terms for freelancers is far from resolved.

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