May 2026
New Jersey has finalized regulations under its ABC test for independent contractor classification, with the rules taking effect October 1, 2026.
The ABC test has long governed how NJ employers determine whether a worker is an employee or an independent contractor, but the finalized regulations now codify and clarify how that test applies across three key statutes: the Unemployment Compensation Law, the Wage and Hour Law, and the Wage Payment Law. That coverage matters because misclassification exposure under those laws can include back wages, tax assessments, and penalties. Employers bear the burden of satisfying all three prongs, and the NJDOL has signaled it will look at the real substance of working relationships, not just contracts or paperwork.
The NJDOL revised the final rules in response to significant business community feedback, pulling back on some of the more expansive provisions in the original proposal. Still, employers who use independent contractors should treat the October effective date as a deadline to review current arrangements.
EANJ members can read more here