The state labor department says the new regulations clarify how employers must apply the ABC test when deciding whether a worker is an employee or independent contractor.
MORRISTOWN, NJ – The New Jersey Department of Labor and Workforce Development adopted new regulations on May 5, 2026, clarifying how businesses must determine whether a worker is an employee or an independent contractor under the state’s statutory ABC test. The rules apply to worker classification under laws including the New Jersey Unemployment Compensation Law, the New Jersey Wage and Hour Law, and the New Jersey Wage Payment Law.
The department said the regulations are meant to give businesses clearer standards for compliance while protecting workers from misclassification. For Morristown-area employers, contractors, freelancers, and gig-style workers, the issue matters because classification can affect wages, unemployment insurance, wage payment protections, and other legal obligations.
The ABC test places the burden on the employer to show that a worker qualifies as an independent contractor. Under the rule, the worker must be free from control or direction over the work, the work must either fall outside the usual course of the business or be performed outside the business’s places of operation, and the worker must be customarily engaged in an independently established trade, occupation, profession, or business.
NJDOL said the adopted regulations reflect changes made after the public comment period, which the department extended from 60 days to 90 days. The department also held an open public hearing and said it received thousands of comments, including business-community feedback that led to revisions.
The rules are scheduled to become operative on October 1, 2026, which is 120 days after the anticipated June 1, 2026 publication and effective date.