The New Jersey Department of Labor recently adopted a stringent interpretation of the ABC test for determining freelance workers versus employees. NJBIA President Michele Siekerka emphasized the importance for businesses to consult with legal counsel about their use of freelance workers under the new rules.
Specifically, the revised Prong B mandates that independent contractors must work outside the usual course of the business or outside its locations, which could make it difficult for many businesses to continue their traditional freelance arrangements. Siekerka expressed concerns that this would discourage employers from engaging independent contractors and create financial burdens when transitioning them to employee status.
Despite requests for a delay in implementing these rules, Governor Mikie Sherrill opted to proceed, reinforcing the challenges businesses now face in navigating this regulatory landscape. Siekerka highlighted that the new requirements significantly increase the burden on employers, raising fears within the business community regarding compliance and worker classification.
