On September 17, the CCSNJ testified before the Assembly Financial Institutions and Insurance Committee and the Assembly Appropriations Committee on A-1511 (Freiman/Calabrese), which addresses New Jersey’s rules for determining whether a worker can be classified as an independent contractor.

Under New Jersey law, businesses use what is known as the “ABC test” to determine whether a worker can be classified as an independent contractor rather than an employee. To meet the test, a business must show that the worker is free from its control, performs work outside the company’s usual course or places of business, and operates an independently established business. If any one of those requirements is not met, the worker is generally considered an employee under state law. This distinction can have significant implications for businesses. Simply calling someone an independent contractor, paying them through a 1099 or having an independent contractor agreement does not automatically make that person an independent contractor under New Jersey law.

New regulations from the New Jersey Department of Labor and Workforce Development provide additional guidance on how the ABC test will be applied and are scheduled to become operative October 1, 2026. In its testimony, CCSNJ urged the State to delay implementation while it conducts a broader review of the ABC test.

A-1511 would provide greater certainty for insurance producers, securities professionals, certain transportation professionals and others who have historically operated as independent contractors. However, the CCSNJ argued that the continued need for occupation-by-occupation exemptions raises a broader question about whether the ABC test itself appropriately reflects the realities of today’s workforce and economy.

The also CCSNJ reiterated its strong support for preventing intentional worker misclassification while emphasizing the importance of preserving legitimate independent contractor relationships. Rather than continuing to address concerns through individual statutory exemptions, CCSNJ urged policymakers to undertake a comprehensive evaluation of the ABC test to determine whether it provides sufficient clarity and flexibility for the modern economy while continuing to protect workers.

The CCSNJ further urged the State to conduct this review before the Department’s new ABC test regulations become operative on October 1.

To read the CCSNJ's written testimony, click here.

Please reach out to Hilary Chebra, Director, Government Affairs at hchebra@chambersnj.com if you have any questions.