N.J. bill proposes revisions to law on employee status

New Jersey lawmakers are considering legislation that would revise factors in the state’s three-part test used to determine whether a worker is an independent contractor.

A. 6249, which will align New Jersey’s test of employee status with the test used by the Internal Revenue Service, clarifies that “to determine whether an individual is an employee or an independent contractor, all information that provides evidence of the degree of control and the degree of independence is to be considered,” a statement appended to the measure reads. “Facts that provide evidence of the degree of control and independence fall into three categories: A) behavioral control; B) financial control; and C) the type of relationship of the parties.”

The bill would repeal statutory language requiring a person providing services for payment to be considered an employee unless three criteria are satisfied: the person has been and continues to be free from control or direction over the performance of the work; the service is outside the usual course of the business for which the service is performed or the work is performed outside of all places of the business; and the person is customarily engaged in an independently established trade, occupation or profession.

New Jersey’s current version of the ABC test dates to the 1990s. Efforts to tighten the test and make it harder to classify workers as contractors, and thus not subject to workers compensation, have failed in recent years.

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