Let's Do This, Jersey

Two items were just introduced in the state Legislature. One would protect a few kinds of independent contractors. The other could help us all.

New Jersey’s Legislature is back in session now, and two Senators put forward items that are directly related to the proposed independent-contractor rule at the New Jersey Department of Labor & Workforce Development.

The first item is a bill that makes me fear we could be entering the Swiss-cheese stupidity portion of the program that happened in California with Assembly Bill 5, when it became every profession for itself trying to get exemptions from the overall awful freelance busting.

The other item just introduced in New Jersey is a concurrent resolution that makes me hope my home state may once again pull out of a California-inspired skid, and then perhaps finally try to move toward reasonable labor and employment policy for the future.

Photo by Rosie Kerr on Unsplash

Here’s the overall state of play, and why these items were both immediately introduced when the New Jersey Legislature came back into session:

• Governor Phil Murphy and the Department of Labor & Workforce Development are refusing to rescind their proposed independent-contractor rule in the face of statewide, bipartisan opposition

• Murphy laughed out loud on live TV at the 99% public opposition to this proposed rule that is readily apparent in the estimated 9,500 written public comments that were filed

• Murphy seems unmoved by the fact that at the public hearing in June, testimony went on for more than three hours and was 3-to-1 against

• Murphy also appears to be ignoring two dozen lawmakers on both sides of the aisle who have spoken out publicly with concerns

• Murphy further seems unconcerned about attorneys who say this proposed rule goes far beyond targeting misclassification cases and instead is an existential threat to the incomes and careers of independent contractors in New Jersey

• Governor-elect Mikie Sherrill told the New Jersey Business & Industry Association she wants to have more discussion about the rule proposal, but while in Congress, she dismissed the same concerns from independent contractors before co-sponsoring and voting to pass similar policy nationwide, championing it as “landmark legislation”

So, to put it mildly, New Jersey’s independent contractors—along with the businesses we work with—are worried.

The way this has shaken out since the California Legislature passed Assembly Bill 5 in 2019, the grassroots group Freelancers Against AB5 documented this type of policymaking hitting independent contractors across more than 600 professions. The process of each separate profession trying to get an exemption was so ridiculous that, according to one lawsuit, it effectively meant independent truck drivers could legally deliver milk, but not juice. Members of the California Advisory Committee to the U.S. Commission on Civil Rights issued a report citing “significant evidence” of disproportionate and negative impacts on women, immigrants, people of color and the politically powerless.

That report also warned other states not to fall into the trap of carve-outs and exemptions. The committee members wrote:

“States should avoid some of the pitfalls that California fell into, including rushing into the adoption of the ABC test and politicizing the exemption process.”

Which brings us to what is happening right now in New Jersey, where lawyers say the proposed Labor Department rulemaking would make our state “even less hospitable to independent contractors” than California, and where everybody who can get the ear of a sitting lawmaker at the State House is seeking protection from the Labor Department’s proposal.

This week, New Jersey state Senator Gordon Johnson, a Democrat who chairs the Senate Labor Committee, filed the bill I mentioned above. It’s Senate bill 4839.

This bill would protect the independent-contractor status of people who are:

Understand the magnitude of what this bill represents. It’s not just that an elbow-throwing scrum for exemptions may have just begun, the same as we all saw happen in California. It’s also that New Jersey’s proposed Labor Department rule is so awful that leaders or lobbyists in these professions seem to believe they need protective legislation when they already appear to have federal regulations in place going back decades.

And this is after New Jersey Realtors filed a public comment saying the proposed Labor Department rule “is not accurate for the real estate brokerage industry”—despite a New Jersey Supreme Court ruling and an amendment to the New Jersey Real Estate License Act that solidify their classification as independent contractors.

If these professions are in trouble, then what chance do the rest of us in the hundreds of other professions even have?

That’s why the second item was filed in the Legislature this week, too. It’s called SCR138, a Senate concurrent resolution that is intended to protect us all from the Labor Department’s proposed rule.

SCR138 is what Republican Senator Declan O’Scanlon, along with Assembly members Gerry Scharfenberger and Vicky Flynn, promised they would file back in August. As O’Scanlon said at the time in a press release:

“This is yet another misguided attempt by the Murphy administration to overregulate New Jerseyans out of their livelihoods. These proposed rules by the DOL directly contradict the Legislature’s intent and would wreak havoc on independent contractors who rely on flexibility and autonomy to make a living.”

The language right at the top of this concurrent resolution is also clear that the intent is to stop what the Labor Department is attempting to do:

SCR138 is the item that attempts to protect us all. And for that, all of us who are not truckers, insurance agents or financial advisers are grateful.

46,000 is Nowhere Near 1.7 Million

Here’s why it’s so important to protect all kinds of professions from this relentless, remorseless freelance busting.

The sales pitch for this kind of independent-contractor policy is that it’s only intended to stop a handful of bad-actor companies that misclassify their employees as independent contractors, denying those workers the wages and benefits they are entitled to receive.

But the reality we have all seen in California—just as the nonpartisan California Legislative Analyst’s Office predicted would happen from the start—is that the widespread restriction of independent contractors does not lead to widespread job creation. Instead, a lot of businesses just stop working with independent contractors. Existing incomes and careers are wrecked.

In California, it wasn’t just independent contractors who took a hit. Think about what happens if you own a small business and you can’t bring in independent contractors to help you fulfill project needs for your clients. You ultimately lose those clients, which means your traditional employees end up with their jobs in jeopardy too. Economists said that’s what happened when they documented how, even with California’s carve-out approach, this kind of freelance busting damaged self-employment and overall employment for affected professions. It wasn’t just the independent contractors who got hurt. It was traditional employees as well.

The math is equally simple and predictable in New Jersey.

Attorneys say the Labor Department’s proposed rule almost entirely eviscerates the ability for anybody to be an independent contractor in New Jersey. That means there are an estimated 1.7 million of us in the crosshairs of this policy mess.

To turn all of those independent contractors into employees—to mitigate the effects of us losing our existing incomes and careers—New Jersey businesses would have to create 1.7 million traditional jobs. New Jersey reportedly netted 46,000 new jobs in 2024, while 2025 has seen significant layoffs. The notion that our state is suddenly going to create 1.7 million traditional jobs is laughable—and the Labor Department’s own proposal states explicitly that this rulemaking would have no impact on generating jobs.

Put another way, the lawyers are saying independent contractors would lose our existing incomes and careers, while the Labor Department is saying no new traditional jobs would be created for us.

As I told the U.S. Senate HELP Committee when I testified in July:

“This is not targeting employee misclassification. This is weaponizing regulatory language to attack independent contractors.”

All of us independent contractors here in New Jersey have been going to public hearings, writing op-eds and telling anyone who will listen—for years now—that we need legislators to solve the root of this policy problem.

We need reasonable regulatory language to determine independent-contractor status in our state. We need protection from this relentless, remorseless freelance busting, once and for all.

Here’s the Good News

While I am obviously partial to the approach that Senator O’Scanlon is taking with Assembly members Scharfenberger and Flynn, I also have some optimism about Senator Johnson’s newly filed bill.

It doesn’t currently have any co-sponsors in the Senate, and as of this writing, there is no Assembly version visible in the public system. That means it’s possible Johnson introduced S4839 as a warning shot to Governor Murphy, letting him know that the Democrat who chairs the Labor Committee is ready to step in and act if the Labor Department fails to rescind its proposal.

We have reason to believe that even though Senator Johnson appears to be favoring just a few professions, he actually understands the big-picture reality. He lists his personal occupation as “independent consultant,” and he was one of the first Democrats to raise concerns about what the Labor Department is attempting to do. He wrote back in June that the proposed rule may have a “substantial negative impact” on “thousands of independent business owners who are properly classified.”

Here is that letter in full:

I asked Senator Johnson last week for a meeting to discuss Senate bill 4839. (It’s my second request to him for a meeting. My first request, in August, went unanswered.) I made clear that I’d like the opportunity to work with him on getting to a solution for everyone, and I look forward to his response.

And a few weeks ago, I saw Assemblyman Scharfenberger and Assemblywoman Flynn in person. They are indeed committed to helping us all.

We need every legislator on both sides of the aisle at the State House to stand up for New Jersey’s independent contractors now. We also need legislators to continue to bring political pressure on the Murphy administration to rescind the Labor Department’s proposed rule.

After that, going forward, we need legislators to work with all stakeholders—especially independent contractors ourselves—to craft legislation that prevents this insanity from ever threatening our state’s workforce and economy again.