New Jersey's ABC Test for Independent Contractors Takes Effect
[TRENTON] New Jersey's ABC test for classifying workers as employees or independent contractors took effect October 1, industry media reported. The standard — considered one of the strictest in the nation — will directly affect construction, trucking, gig-economy and other sectors that rely heavily on independent contractors.
Under the ABC test, a business must prove three prongs to classify a worker as a contractor: the worker is free from the company's control; the work performed is outside the company's usual course of business; and the worker is independently engaged in the same trade. Failing any prong means the worker is an employee, obligating the business to cover unemployment insurance, workers' compensation and other employer duties.
Supporters say the rule curbs misclassification used to dodge payroll taxes and labor protections; business groups counter that small firms and freelancers face higher compliance costs and litigation risk.
The state Department of Labor said it will issue enforcement guidance and offer transition-period consultations to help businesses audit their worker classifications.
(Source: industry media)
Source: industry media
Published by GSM · USA (original Chinese edition)
Photo: CC BY 2.0（Wikimedia Commons，摄影：Shixart1985）
