New Jersey group: Proposed rule would harm independent workers

The Garden State Initiative is warning policymakers that a proposed New Jersey Department of Labor rule could significantly restrict flexible work arrangements, impacting thousands of freelancers, caregivers, and small business owners across the state.

The rule seeks to expand the state’s “ABC test” to determine worker classification. This approach would reclassify many independent contractors as employees, limiting opportunities and raising costs for families and employers alike.

GSI officials said New Jersey policymakers should look to California’s Assembly Bill 5, enacted in 2020, which they said had similar goals and led to widespread job losses and confusion.

“Independent contracting is not a loophole—it’s a legitimate career choice that millions of Americans value for its flexibility and autonomy,” Audrey Lane, president of GSI, said in a release. “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.”

Today, more than 72 million Americans—nearly one in three workers—earn income through freelance or gig work. In New Jersey, these flexible arrangements are critical for parents balancing childcare, retirees supplementing their income, and professionals managing multiple clients or projects.

Yet under the proposed rule, the Department of Labor would:

• Broaden the definition of employer control, treating routine business practices, including requiring insurance or using digital platforms, as evidence of control
• Redefine a worker’s own vehicle or a client’s home as an employer’s place of business
• Dismiss traditional signs of independence, such as holding professional licenses, receiving 1099 forms, or working with multiple clients

These changes would effectively create a presumption of employment, eliminating many legitimate paths to independent work.