By Vin Gopal
The state Department of Labor’s proposed rules for independent contractors could harm the very groups of workers it is trying to help.
Residents and local businesses have been calling our Legislative District 11 office for the past two weeks voicing concerns that the proposed rule change would limit the availability of independent contractor status. Independent contractors, including freelancers and ride-share drivers, local businesses and business organizations say the rules would take away the flexibility that they need to operate.
Those new rules would codify the NJDOL’s interpretation of the ABC test for independent contractor status under the state’s Unemployment Compensation Law, the New Jersey Wage and Hour Law, and and other state laws. Under the proposed change, a worker would have to pass all three prongs of the ABC test, which measures whether a worker is free of their employers’ control, whether the person’s work is performed outside a firm’s regular course or place of business, and whether the worker is engaged in business independent of a given firm.
Supporters of the rule change say classifying some workers as independent contractors denies those workers employee benefits that would be required by law when they are employees. The DOL says its proposal reflects the department’s ongoing commitment to protecting workers’ rights and ensuring a level playing field for employers across the state.
As of last week, approximately 20 state legislators from both parties, including my LD11 partners, Assemblywomen Margie Donlon and Luanne Peterpaul, have come out against the new rule. Numerous business groups, including the state’s largest business trade association, the New Jersey Business and Industry Association, have opposed the rule change. The NJBIA called the proposal “legally flawed, economically unsound, procedurally deficient, and socially regressive.”
The rule change is likely to be most harmful to those who disproportionately rely on flexible, independent work: women, caregivers, racial minorities, immigrants, and people with prior justice system involvement. The rule would make the workplace even less inclusive for these workers.
Nursing home residents would feel the impact if owners decide to use fewer healthcare aids rather than bear the cost of hiring the independent contractors they now bring in on an as-needed basis.
We’ve also heard from some constituents who work in the life insurance businesses as independent contractors. The DOL rule as it’s proposed could force independent advisors and agents to be classified as employees. The change would cause advisors to lose flexibility in the products and services they provide independently, resulting in fewer affordable choices for their customers.
Our LD11 office stands with independent contractors and small businesses in urging the Labor Department to withdraw the proposed rule change and engage in a more transparent, balanced, and evidence-driven process that supports both worker protections and economic freedom.
On an unrelated note, the LD11 Constituent Services Team has been hitting the road with Mobile Office Hours to assist residents in the towns where they live with property tax relief, veterans benefits, utility assistance, disability services, and other state programs. The Team will hold MOHs next Tuesday, August 19, from 10 a.m. to 2 p.m., at the Neptune Senior Center; on Thursday, August 28, from 9:30 a.m. to 1 p.m., at the Asbury Park Senior Center; and on Tuesday, Sept. 9, from 10 a.m. to 2 p.m., at the Long Branch Senior Center. For more information on MOHs or other assistance, please call the LD11 office at (732) 704-3808.
###
