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ARTICLE · 05 MAY 2025

New Jersey Clarifies Independent Contractor Classification Through Final ABC Test Rules

Bond, Schoeneck & King PLLC
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New Jersey's Department of Labor has finalized regulations that formalize how employers must apply the ABC test when classifying workers as independent contractors versus employees. These rules, effective October 1, 2026, emphasize a substance-over-form approach and extend across multiple state employment laws, creating heightened scrutiny for businesses relying on contractor relationships.

United StatesEmployment and HR
Jason Kaufman
Jason Kaufman
Mallory Campbell
Mallory Campbell
Rachel Kreutzer
Rachel Kreutzer

On May 5, 2026, the New Jersey Department of Labor and Workforce Development (the Department) adopted final regulations clarifying the application of the ABC test for determining whether a worker is an independent contractor or an employee (N.J.A.C. 12:11). Effective Oct. 1, 2026, the rules do not create a new test; rather, they formalize how the Department expects employers to assess and defend independent contractor classifications and underscore the Department’s substance-over-form approach.

The ABC test governs worker classification under the New Jersey Unemployment Compensation, Wage and Hour and Wage Payment Laws. The regulations apply across multiple laws the Department administers or enforces, including the New Jersey Temporary Disability Benefits Law, Earned Sick Leave Law and Call Center Jobs Act.

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