The New Jersey Business and Industry Association called on the Senate Labor Committee on May 11 to invalidate or significantly change a recently adopted Department of Labor and Workforce Development rule that affects independent contractors in New Jersey.
The association said the new rule makes it much harder for workers to be classified as independent contractors. This issue is important because it could impact freelancers, small businesses, and employers across many industries. The New Jersey Business and Industry Association serves as the nation’s largest statewide employer association, representing employers across various sectors, according to the official website.
Jack Kelly, policy analyst for NJBIA, submitted written testimony before the committee’s public hearing. He wrote, “(The rule) raises profound legal, economic, and procedural concerns and should be invalidated entirely.” Kelly urged lawmakers to consider an Assembly Concurrent Resolution or Senate Concurrent Resolution to void these regulations. He also suggested using the next 120 days “to work collaboratively on statutory remedies that allow these rules to be interpreted in a way that acknowledges the realities of the modern gig economy, and does not infringe upon legitimate independent contractors and their right to maintain that status.”
Kelly said NJBIA has opposed changes made last year by the Murphy administration regarding how workers are classified under what is known as the ABC test. The proposal received over 9,500 comments against it while most letters supporting it came from unions. Twenty-four legislators from both parties have asked state officials not to move forward with this proposal.
Michele Siekerka serves as president and chief executive officer of NJBIA according to the official website. She joined Kelly in offering verbal testimony at Monday’s hearing. The group highlighted concerns about strict interpretations of parts B and C of the ABC test now codified by state officials: “It is our contention that this debate was never simply about protecting workers who were truly misclassified,” Kelly wrote.
According to Kelly’s testimony, similar rules introduced in California in 2019 led to hundreds of exemptions being granted there along with reduced freelance opportunities, job losses, legal disputes—and eventual repeal of those standards.
A final decision has not been made; currently there is a stay delaying implementation for 120 days while possible legislative action or changes are considered.
