Gig workers outraged over NJ rule change for 1.7 million independent contractors

🔴 Murphy administration approves big changes for 1099 workers

🔴 1.7 million New Jersey workers are independent contractors

🔴 The new rules mirror controversial changes in California

The Murphy administration is looking to force new rules for independent contractors like rideshare drivers, despite outcry from the gig workers who would be affected.

State labor officials say the changes would protect employees from misclassification that could deprive them of proper pay, benefits, or rights.

“This rule proposal is a critical step in providing clear, reliable guidance to employers to help them comply with the law and prevent the illegal misclassification of employees," said state Labor Commissioner Robert Asaro-Angelo.

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But many independent contractors see the changes as a threat to their jobs.

In June, gig workers swarmed a labor department hearing and said the rules would drive up costs for businesses and harm the state economy.

"Rescind this proposal before you hurt anybody else," said Kim Kavin, co-founder of the group Fight For Freelancers.

New Jersey looks to codify ABC test changes for gig workers

The new labor department rules would codify how it applies the "ABC test" for determining whether a worker is an independent contractor or an employee.

According to the New Jersey Unemployment Compensation Law, a worker is considered an employee by default unless all three of the following apply:

A. The worker is free from control or direction by the business, such as hours or pay rate

B. The worker performs their tasks outside the usual place of business for the enterprise

C. The worker is in an "independently established trade, occupation, profession or business"

If a worker meets all three criteria, then they are considered an independent contractor.

Under the rules change, the burden of proof would be on employers to show that a worker is an independent contractor. Otherwise, the worker would be considered an employee.

California gig worker law comes to New Jersey

In a June 2025 Op-ed in the Washington Examiner, U.S. Labor Department Deputy Secretary Keith Sonderling said changes to gig work had done significant "damage" to California's economy.

In 2019, California passed Assembly Bill 5 that codified the ABC test. It redefined most independent contractors as employees.

"Instead of improving livelihoods, it triggered chaos," said Sonderling, who was appointed by President Donald Trump.

The next year, lawmakers passed an emergency update with 109 categories of industries with exceptions, including doctors, lawyers, and musicians.

Voters also overwhelmingly passed Prop. 22, a 2020 ballot measure that overrode AB5. It created exceptions for app-based drivers like rideshare and delivery service workers.

"Apparently, the Murphy administration looked at all that and said let's see how we can make it even worse," Kavin said on the New Jersey 101.5 Morning Show on Wednesday.

New Jersey business group opposes changes to gig worker rules

The New Jersey Business & Industry Association has come out against the state labor department's rules proposal.

Elissa Frank, the NJBIA vice president of government affairs, said the changes would do more harm than good.

“The main takeaway is that under the proposal it will be extremely difficult to be considered an independent contractor in New Jersey. And that may be what the Department of Labor’s goal is, in the name of worker protections," Frank said.

The rules would also likely increase prices for delivery and rideshare services like Uber, Lyft, Grubhub or DoorDash, Frank said.

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