Bill > A1117

Introduced Session

This bill revises the test used to determine whether a worker is an employee or an independent contractor under certain State labor laws. The "ABC" test is widely used under current State labor law for determining whether a worker is an employee or an independent contractor. It is used to determine employee and employer obligations and entitlements under the following laws: the "unemployment compensation law," the "Temporary Disability Benefits Law," the New Jersey wage payment law, and the "New Jersey State Wage and Hour Law." It is also used under the "New Jersey Gross Income Tax Act," for purposes of determining whether an employer is required to deduct and withhold State income taxes. The "ABC" test provides that an individual who performs services for remuneration is presumed to be an employee unless the employer can show to the satisfaction of the Department of Labor and Workforce Development that: (A) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and (B) Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and (C) Such individual is customarily engaged in an independently established trade, occupation, profession or business. If an employer fails to prove any one of the three criteria for showing a worker is an independent contractor, the worker will be classified as an employee, and will be eligible for benefits pursuant to the labor laws listed above. Additionally, the employer and employee will be required to comply with the contribution and participation obligations of the respective labor laws. This bill eliminates the B and C factors of the employment status test, thereby limiting the test to factor A, whether the individual has been and will continue to be free from control of the employer. By limiting the factors used in the employment status test to the control test, it will be easier for employers to comply with regulations and categorize workers for purposes of State labor laws.

Committee Categories

John DiMaio (R)*,  Rob Clifton (R),  Sean Kean (R),  Greg McGuckin (R),  Nancy Muñoz (R),  Erik Peterson (R), 

Introduced, Referred to Assembly Labor Committee (on 01/09/2024)

Official Document