Last night on News12’s “Ask the Governor” show, New Jersey Governor Mikie Sherrill was asked to respond to numerous concerns about her administration’s ABC Test independent-contractor rule that takes effect today.
The show’s host, Eric Landskroner, began by reading from a letter that the New Jersey Chamber of Commerce, in tandem with the New Jersey Business & Industry Association, sent to Governor Sherrill a few days ago.
The portion of the letter that Landskroner quoted from states:
“Legitimate independent contractors can demonstrate nearly every traditional indicator of independence—they can operate their own businesses, serve multiple clients, maintain insurance, provide their own equipment, negotiate their own rates, and assume their own business expenses—and still fail the test because the service they were contracted to perform is deemed essential or integral to the contracting entity’s business.”
Landskroner then added to that question by reading from part of a related question that I sent in for the “Ask the Governor” show last night:
“The ABC Test [rule] faced 99% opposition in thousands of written comments, overwhelming opposition at several standing-room-only public hearings, and even Senate President Nicholas Scutari has asked you to delay this rule until July 2027. Will you grant that delay?”
Governor Sherrill responded that all her Labor Department is doing is codifying rules and regulations that are already in place.
I honestly couldn’t believe it when she said it.
Incredibly, the line that Governor Sherrill used is the same one that Governor Phil Murphy’s Labor Department used when it proposed this deeply misguided ABC Test rulemaking last year, saying it was merely codifying what already exists.
At that time, the NJBIA was also among those who pointed out how the claim was not true:
“These regulations do not merely ‘codify’ existing law as the Department claims—they significantly alter it,” said NJBIA Vice President of Government Affairs Elissa Frank.
After the Murphy administration saw massive pushback to that version of the ABC Test rule—including from attorneys who said it almost entirely eviscerated the ability to be an independent contractor, and posed an existential threat to independent work itself—the Sherrill administration altered the rule’s text prior to adopting a final version of it.
And in doing so, her own administration made it awfully hard to believe that what Governor Sherrill said last night is true.
Her Labor Department’s adopted ABC Test rule, which she said is merely codifying what’s already in place, is different from the Murphy Labor Department’s proposed ABC Test rule. The two versions of the rule can’t both be codifying what’s already in place when the versions are not even the same.
But wait. There’s more.
They’re not even the first ones to make this same claim in Trenton.
Steve Sweeney Said the Same Thing Too
When Governor Sherrill said she’s only codifying regulations that are already in place, she was repeating the same talking point from 2019 that her own administration just debunked.
Back in 2019, when then-Senate President Steve Sweeney sponsored ABC Test legislation here in New Jersey, independent contractors packed the State House to testify en masse against it. We said at the time that Sweeney’s bill was trying to copy California’s ABC Test law, which we rightfully said showed every early sign of creating what economists later confirmed were catastrophic results.
Sweeney insisted that we were all wrong, and that the only thing he was doing was codifying existing New Jersey regulations.
InsiderNJ quoted Sweeney back then:
“These bills will simply codify into law existing regulations so that future administrations can’t ignore, change or discard the protections already in place to protect workers against the loss of basic rights by being misclassified.”
Here we are seven years later, and Governor Sherrill’s own administration just clearly stated in writing that in 2019, Sweeney’s bill was indeed trying to copy California’s ABC Test law.
You can read what Sherrill’s team wrote for yourself. Her newly adopted independent-contractor rule states, on pages 90 and 91:
“As to the 2019 New Jersey bill (S4204), as introduced, it would have altered New Jersey’s statutory ABC test in ways that made it virtually identical to the ABC test in California AB5.”
So, with Governor Sherrill’s appearance on TV last night, this is now the third time we’re being asked to believe that the State of New Jersey is merely codifying what already exists with the ABC Test—while the state has in fact now tried to codify three different things.
This is like listening to Abbott and Costello perform a rendition of “Who’s on First,” all while lawyers keep saying the state is changing how the ABC Test is being interpreted and applied, in ways that continue to create concerns at their core.
But They Say We’re The Ones Who Are Confused
And what’s more, the people pushing this ABC Test policy path also keep telling us that the actual problem is all of us being confused.
Back in 2019, as part of what turned out to be a masterclass on sowing public confusion, Senator Sweeney wrote an op-ed not only saying there was a lot of “misinformation” about his ABC Test bill, but also comparing my fellow freelancers and me to “Russian operatives trying to interfere in our elections.” Because we refused to back down from what everyone now agrees was the truth all along.
The same word that Sweeney used in 2019—“misinformation”—is also the word that Governor Sherrill’s acting Labor Commissioner, Kevin Jarvis, just used in the press last month as her administration faces 99% public opposition and pushback from high-ranking Democrats in her own party in the Legislature.
And while Governor Sherrill didn’t say “misinformation” on television last night, she did use a similar word: “misunderstanding.”
“I think there’s a lot of misunderstanding of what’s in this test,” Governor Sherrill said on News12. “If there are areas where it has somehow swept people in [inaudible] who should not be there, then I am more than happy to work with the Legislature on carveouts for those groups.”
That last bit, about carveouts, is new, and it is notable for three reasons.
First, it goes against what the politically powerful New Jersey AFL-CIO (which helped Sherrill get elected) has been saying, about how my home state should have no new carveouts for any professions from the ABC Test to determine independent-contractor status.
Second, it sets up legislators at the State House to bear the brunt of having to pass bill after bill as profession after profession, with hundreds of professions affected, comes looking to them for protection so independent contractors of all kinds can simply continue to earn a living.
And third, it means that New Jersey’s independent contractors are now arguably in an even worse position than California’s were when that state enacted its disastrous ABC Test law in 2019.
We’re Talking Doctors, Lawyers, Engineers…
As I wrote more than a year ago in a Q&A with Karen Anderson of California, what happened with carveouts from the ABC Test in that state was utterly insane.
Anderson is the founder of Freelancers Against AB5, the leading advocacy group in California that is still trying to figure out how to get that state’s ABC Test law repealed. She is currently a Future of Work Fellow with the Institute for the American Worker in Washington, D.C., an excellent program about labor and employment policy that I completed earlier this year. And, Anderson and I both testified before Congress on this issue in 2023, when her testimony included the following passage, some three years after California’s ABC Test law and a cleanup bill that followed it had gone into effect:
“To this day, despite the so-called exemptions for certain professions added in September 2020 via the cleanup bill AB2257, the law continues to wreak havoc on legitimate independent contractors and small-business owners. As it turns out, many of the exemptions come with caveats and fine print that make some exemptions nearly impossible to take advantage of. The convoluted language in the law also creates a chilling effect in which businesses don’t want to utilize independent contractors from California at all, even if there is a pathway to an exemption—because there are so many potential landmines.”
All of that happened in California after the ABC Test law was enacted with dozens of professional carveouts already in it.
California’s carveouts included what Anderson describes as “favored professions at the Capitol,” including doctors, lawyers, accountants, veterinarians, dentists, real-estate agents, private investigators, engineers, travel agents, psychologists, architects, commercial fishermen and many more. “The exemptions were controlled by a single lawmaker, and were capricious and arbitrary,” Anderson says. “Backroom dealing took place.”
Choices about which professions got carveouts in California were also largely dictated by Big Labor, according to members of the California Advisory Committee to the U.S. Commission on Civil Rights, who wrote in 2024:
“The California legislature essentially outsourced the decision-making process for obtaining an exemption from AB5. The result was the politically powerful and those in industries not historical targets of organized labor were more readily able to obtain an exemption.”
Even with more than 100 professions ultimately receiving some kind of a carveout in California, Anderson—whose Facebook group includes more than 18,000 people—collected so many real-life stories that she was able to document more than 600 affected professions.
Congressman Kevin Kiley of California read that list into the public record on the floor of the U.S. House of Representatives, trying to warn the rest of the country about the widespread harm that this kind of ABC Test policymaking can cause.
Even reading at a fast pace, it took him 10 full minutes to name all the professions:
And notably in the context of what happened on TV here in New Jersey last night, all of those professions were affected after the Assemblywoman who sponsored California’s ABC Test law—a card-carrying Teamster who today leads the California Federation of Labor Unions, AFL-CIO—went on television and claimed that all she was trying to do was codify what already existed.
Yes. Really.
Good luck to us all here in New Jersey, where we’re starting from zero carveouts in the new independent-contractor rule, and it’s now every profession for itself.
New Jersey’s Legislature Must Act
The best choice that New Jersey’s lawmakers could make right now would be to pass Senator Declan O’Scanlon’s concurrent resolution, SCR62, and its Assembly companion, ACR75, that Assemblywoman Vicky Flynn sponsored. These concurrent resolutions have been sitting in Trenton ready to go since January.
SCR62 and ACR75 would invalidate the Labor Department’s rulemaking, giving the Legislature all the time it needs to correct this policy mess with legislation. They do not require the governor’s signature to take effect.
I would also suggest that the Legislature pursue the recommendation that the New Jersey Chamber of Commerce and the NJBIA made to create a task force on this policy issue:
“We respectfully request that your Administration delay the regulations until July 1, 2027, and work with the Legislature to establish a balanced task force representing workers, organized labor, independent contractors, employers, nonprofits, and other affected stakeholders. Nine additional months would allow New Jersey to examine the experiences of other states, evaluate the economic evidence, hear directly from affected workers and businesses, and develop a framework that targets genuine misclassification without jeopardizing legitimate independent work.”
After that, with what I would hope are task-force recommendations based on accurate information—and not the mischaracterized data and research that Governor Murphy’s task force produced—New Jersey’s Legislature could at long last put in place meaningful guardrails to protect the incomes and careers of all the state’s estimated 1.7 million independent contractors going forward.
Barring that kind of an outcome in the near future, we are going to experience absolute carveout chaos.
