Republican legislative leaders are making a last-minute push to postpone New Jersey’s new ABC test regulations, which are scheduled to take effect Oct. 1.
TRENTON, N.J. — New Jersey Republican leaders are urging Gov. Mikie Sherrill to delay new independent contractor regulations until July 1, 2027, warning that businesses and workers still face unanswered questions just hours before the rules are scheduled to take effect.
Senate Republican Leader Anthony Bucco and Assembly Republican Leader John DiMaio sent Sherrill a letter Tuesday asking her administration to postpone the Oct. 1 operative date for the Department of Labor and Workforce Development’s new rules governing how the state applies its ABC test for independent contractor status.
The New Jersey Department of Labor says the regulations do not create a new legal test, but instead clarify existing statutes and decades of court decisions governing whether workers should be classified as employees or independent contractors.
GOP Leaders Say Legislature Needs More Time
Bucco and DiMaio said the Legislature was not given enough meaningful time to review the regulations before they become operative.
“With the regulations scheduled to take effect tomorrow, New Jersey workers and businesses still do not have the certainty they deserve about how these rules will affect legitimate independent contractor relationships across our state,” the lawmakers wrote.
The Department of Labor adopted the rules in May and delayed their operative date for 120 days.
But Bucco and DiMaio argued much of that window overlapped with the Legislature’s busiest budget period and its traditional summer recess.
“In practical terms, the Legislature was given a matter of weeks, not four months, to consider the implications of an economy-wide regulation affecting independent workers and businesses across virtually every sector of New Jersey’s economy,” they wrote.
Scutari Also Wants a Delay
The Republican leaders said Senate President Nicholas Scutari has also asked for implementation to be postponed until July 1, 2027.
“Senate President Nicholas Scutari has reached the same conclusion,” Bucco and DiMaio wrote, saying the original period provided to lawmakers was too short for the level of review required.
That adds bipartisan pressure on the Sherrill administration as lawmakers continue considering legislation dealing with independent contractor classifications for specific professions and industries.
Thousands of Public Comments Submitted
The lawmakers also pointed to the volume of opposition submitted during the rulemaking process.
Bucco and DiMaio said more than 9,500 comments were submitted and that more than 99% opposed the proposal.
“Whatever one’s position on the underlying policy, opposition on that scale should warrant greater scrutiny before an economy-wide regulation becomes operative,” they wrote.
The Department of Labor said it extended the public comment period from 60 to 90 days, held a public hearing and modified portions of the proposal following feedback from workers and businesses.
What New Jersey’s ABC Test Requires
Under New Jersey’s ABC test, a business generally must satisfy all three parts of the standard before treating a worker as an independent contractor.
The worker must be free from control or direction over the work, the services must fall outside the company’s usual course or places of business, and the worker must be engaged in an independently established trade, occupation, profession or business.
State labor officials say the new regulations provide clearer guidance for businesses while preserving protections for legitimate independent contractors.
Republican lawmakers argue questions remain about how those standards will be applied to workers who intentionally operate their own businesses.
“A policy this consequential should be decided through the legislative process, not administrative rulemaking,” Bucco and DiMaio wrote.
Lawmakers Warn of Economic Uncertainty
The letter stresses that the Republican leaders support enforcement against companies that deliberately misclassify employees to avoid paying wages, benefits or other obligations.
Their concern, they said, is that broader uncertainty could affect legitimate independent work.
“Protecting workers from exploitation, however, does not require creating uncertainty for legitimate independent contractors who value the flexibility, autonomy and opportunity that independent work provides,” they wrote.
The lawmakers warned businesses could respond by reducing contractor opportunities, moving work elsewhere or avoiding independent contractor relationships altogether.
Unless Sherrill’s administration delays implementation, the regulations are scheduled to become operative Oct. 1.
The issue is expected to remain a significant New Jersey politics and business debate as lawmakers consider whether additional statutory changes are needed.
