Gig work crackdown begins in NJ as fears grow over jobs and livelihoods
🔴 New Jersey's tougher independent contractor regulations take effect today after Gov. Mikie Sherrill declined calls for another delay.
💼 Critics say the rules could disrupt work for freelancers, truckers, musicians, health care workers, sports officials and other contractors.
⚠️ Business groups and lawmakers from both parties sought a delay until July 2027, but the Sherrill administration allowed the rules to take effect.
New Jersey's controversial new rules governing independent contractors take effect today, despite increasingly urgent calls from business groups, freelancers and lawmakers from both parties for Gov. Mikie Sherrill to delay them.
The regulations spell out how the state Department of Labor and Workforce Development will apply New Jersey's ABC test, which determines whether someone can legally work as an independent contractor or must be classified as an employee. The department says the regulations clarify existing law and decades of court decisions rather than create a new test.
Critics insist the practical impact could be much greater.
New Jersey independent contractor rules take effect
Opponents estimate about 1.7 million New Jerseyans earn at least some income through independent work. That does not mean 1.7 million people will lose their jobs. It does mean a huge segment of the workforce could potentially be touched by how the state interprets and enforces the rules.
The concerns reach across a remarkably broad range of professions, including independent truckers, musicians, writers, consultants and sports officials. Lawmakers have already considered bills designed to protect certain professions from reclassification, including amateur sports officials.
Under the ABC test, a worker is presumed to be an employee unless the business can satisfy all three requirements: the worker must be free from control or direction; the work must generally be outside the company's usual course or place of business; and the worker must operate an independently established business or profession.
Sherrill rejects calls for another delay
The rules were originally given a 120-day delay before today's operative date to give lawmakers time to consider changes. But no broad legislative fix was enacted.
Senate President Nick Scutari, a Democrat, asked Sherrill to delay implementation until July 1, 2027, warning the regulations remained too broad and could adversely affect workers and businesses. The New Jersey Business & Industry Association and New Jersey Chamber of Commerce later made the same request, as did Republican legislative leaders.
Sherrill did not grant another delay.
NJBIA President Michele Siekerka expressed "deep disappointment" Wednesday night, arguing the new regulatory framework creates uncertainty for businesses that use legitimate independent contractors.
California's ABC test offers a warning
Critics have repeatedly pointed to California, which adopted its sweeping AB5 worker-classification law in 2019.
A 2024 Mercatus Center study found self-employment declined 10.5% on average among occupations affected by AB5, while overall employment declined 4.4%. Researchers said they found no significant evidence of a corresponding increase in traditional employment.
California subsequently created numerous exemptions from its ABC test.
NJ says fears about ABC rules are overblown
Acting Labor Commissioner Kevin Jarvis strongly disputes predictions of widespread disruption.
Jarvis says the regulations do not change the ABC test or the state's enforcement policy, but instead put decades of existing court and administrative decisions into regulation. The Labor Department says the rules will protect workers from misclassification while preventing companies from gaining an unfair advantage by improperly treating employees as contractors.
Critics say the test now comes today.
After months of warnings, thousands of public comments and repeated requests for more time, New Jersey's new independent contractor regulations are officially in effect.
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