New Jersey Adopts ABC Test Rule

Republican Assemblywoman Vicky Flynn calls the move "unprecedented" as the NJBIA says it's "definitely a disappointment."

Today, under the administration of Governor Mikie Sherrill, the State of New Jersey adopted the previous administration’s proposed independent-contractor rule that faced 3-to-1 opposition at last summer’s public hearing and 99% opposition during the written public-comment process.

The Department of Labor & Workforce Development issued a press release with this quote from acting Labor Commissioner Kevin Jarvis:

“We heard from New Jersey’s business community and workers — and we acted on it. We removed provisions in the draft rules that created uncertainty and built a framework shaped by their input, one that protects legitimate independent contractors, supports employees, and respects businesses that follow the rules. At its core, this action has always been about protecting workers through fairness and clarity. When expectations are set, responsible employers can compete on a level playing field, without being undercut by those who misclassify workers.”

The final rule, which is more than 200 pages long, is available to read here.

Early Reactions

Almost immediately, the New Jersey Business & Industry Association issued a press release that stated:

“For over a year, NJBIA has been out front explaining the significant challenges our job creators, our gig workers and our entrepreneurs would face if this Murphy era rule proposal was adopted as stated, effectively grinding significant portions of the gig economy to a halt in New Jersey.

“That proposal significantly reduced flexibility and opportunities for freelance workers who choose to be so, as well as the added costs facing businesses. It is significant to note that the rules would have a negative disproportionate impact on women, working mothers and minorities, not to mention the further hit to New Jersey’s affordability agenda.

“Over the past 90 days we reiterated these extensive concerns and strongly encouraged the Sherrill administration to abandon that misguided proposal through transparent and open dialogue, which was provided. While some of our suggested changes were included, it is definitely a disappointment that any form of a new ABC rule proposal is advancing toward adoption.”

Republican state Assemblywoman Vicky Flynn, on social media, called the state’s action “unprecedented”:

The newly adopted rule, according to the Labor Department, will be operative on October 1, 2026, which is 120 days from the anticipated June 1, 2026, publication/effective date.

Flynn is the Assembly’s primary sponsor of a concurrent resolution that has already been introduced there, as well as in the state Senate, that could invalidate this rulemaking.

Two dozen lawmakers on both sides of the political aisle raised their voices publicly with concerns during the rulemaking process.