The Garden State Initiative (GSI) has raised concerns about a proposed rule from the New Jersey Department of Labor that could change how independent workers are classified. The organization warns that the new regulation would expand the state’s “ABC test,” potentially reclassifying many freelancers, caregivers, and small business owners as employees.
According to GSI, this move could limit flexible work arrangements and increase costs for both families and employers in New Jersey. Audrey Lane, President of GSI, stated: “Independent contracting is not a loophole—it’s a legitimate career choice that millions of Americans value for its flexibility and autonomy. New Jersey should learn from California’s experience, where broad reclassification forced thousands of workers out of business and created unnecessary exemptions. Our state can protect workers and expand benefits without eliminating the independence that freelancers have chosen. We urge policymakers to pursue smart, flexible solutions that empower New Jersey families, not constrain them.”
Currently, more than 72 million Americans earn income through freelance or gig work. In New Jersey, such arrangements are especially important for parents managing childcare responsibilities, retirees seeking supplemental income, and professionals who handle multiple clients or projects.
Under the proposed rule changes, the Department of Labor would broaden what counts as employer control by including routine practices like requiring insurance or using digital platforms as evidence of control over workers. The rule would also redefine locations such as a worker’s own vehicle or a client’s home as an employer’s place of business and disregard traditional signs of independence like holding professional licenses or working with multiple clients.
GSI points to California's Assembly Bill 5 (AB5), enacted in 2020 with similar intentions. After AB5 was implemented in California, studies found one in ten independent contractors lost work. Lawmakers then had to create over 100 exemptions due to economic disruption, resulting in a complex system affecting small businesses and workers.
GSI notes that nearly all public comments on the proposed New Jersey rule—99%—expressed opposition.
The organization argues that groups most affected by these changes would include parents needing flexible schedules, retirees doing part-time consulting or contract work, immigrants and minorities entering the workforce through gig jobs, and independent professionals who rely on autonomy.
As alternatives to the current proposal, GSI recommends developing portable benefits for independent workers, targeting real abuses rather than broad restrictions, and encouraging innovation in work models.
Surveys cited by GSI indicate that 84% of full-time independent workers report higher job satisfaction compared to traditional employment; more than half say they would not return to conventional jobs if given the choice. GSI warns that stricter employment classifications could disproportionately harm women, minorities, young people, and others striving for upward mobility.
GSI urges state policymakers to reject the proposed rule in favor of measures supporting worker empowerment and entrepreneurship while maintaining economic competitiveness for New Jersey.
