TRENTON, N.J. — New Jersey has adopted new regulations aimed at clarifying how workers are classified as employees or independent contractors, state labor officials announced.
The rules, adopted by the New Jersey Department of Labor and Workforce Development, provide guidance on applying the state’s “ABC test,” which determines employment status under laws including the Unemployment Compensation Law, Wage and Hour Law and Wage Payment Law.
Officials said the changes are intended to give businesses clearer standards while protecting workers’ rights and ensuring fair competition.
“We heard from New Jersey’s business community and workers — and we acted on it. We removed provisions in the draft rules that created uncertainty and built a framework shaped by their input, one that protects legitimate independent contractors, supports employees, and respects businesses that follow the rules,” said Acting Labor Commissioner Kevin D. Jarvis. “At its core, this action has always been about protecting workers through fairness and clarity. When expectations are set, responsible employers can compete on a level playing field, without being undercut by those who misclassify workers.”
The regulations are based on decades of legal precedent, including rulings by the New Jersey Supreme Court, and incorporate feedback gathered during an extended public comment period and hearing process.
“Thanks to the collective efforts of the New Jersey Supreme Court, our legislators, Governor Sherrill, our workforce, and the business community, we’ve helped solidify workers’ rights in the law,” Jarvis added.
Under the ABC test, employers must prove that a worker is free from control, performs work outside the usual course or location of the business, and is engaged in an independently established trade or profession to be classified as an independent contractor.
Officials said the new rules will take effect Oct. 1, 2026.
The department said the changes aim to reduce confusion, prevent worker misclassification and establish consistent enforcement standards across industries.
The full rule is available at: https://www.nj.gov/labor/assets/PDFs/Legal%20Notices/Rule%20Adoptions/NJAC_12_11_(notice_of_adoption)_FILED.pdf.
