Too Much Salt
You don't need to be a policy expert to understand what New Jersey is doing to independent contractors. You just have to know about mashed potatoes.
Back when I was married to the youngest of 15 children (yes, I had that many in-laws), I would host a huge Thanksgiving gathering that required about a week’s worth of cooking. And every year, just as predictably as the Macy’s parade on television, there would be a disagreement about whether my mashed potatoes were properly seasoned.
The recipe said “add a dash of salt,” so I would add what I understood to be a dash of salt. I thought the mashed potatoes tasted great. But one brother-in-law would complain that it was too much salt, even if I only dropped in a few grains. One sister-in-law would always admonish me that it was far too little salt, even if I dumped in an entire box of Morton’s Kosher.
My problem was that I was up against the concepts of interpretation and application.
When the recipe says “add a dash of salt,” there’s room to interpret exactly what those words on the page mean, and then to take action and apply that interpretation in ways that other people may find wholly indigestible. Subjectivity comes into play, far more so than if the recipe says “add 1/4 teaspoon salt.”
This is the same concept, interpretation and application, that is causing so much turmoil right now when it comes to independent-contractor policy in my home state of New Jersey.
What the State Just Did
New Jersey’s Labor Department, about a year ago under the administration of Governor Phil Murphy, proposed its own interpretation of ABC Test regulatory language that is used to determine who is, and is not, a legally operating independent contractor.
The ABC Test is already a hard one to pass on its own, but the interpretation of this already difficult test that New Jersey’s Labor Department proposed was so extreme that attorneys said it would almost entirely eviscerate the ability of anyone to be an independent contractor in the state. The proposed interpretation meant that pretty much nobody would be able to pass the test anymore.
Some of the ideas New Jersey’s Labor Department proposed were really over-the-top, such as suggesting that if independent contractors were required to follow basic public safety laws, then those same independent contractors should have to be reclassified as employees. Industry experts said that would have meant things like owner-operator truckers being required to become employees if a contract they signed required them to stop at red lights.
Legal experts also said the proposed version of New Jersey’s ABC Test rule was trying to interpret some parts of the test right out of existence. As if the Labor Department could look at the words of the ABC Test on the page and just decide they meant something else entirely. “Or” became “and.” That sort of thing.
Kind of like if my mother-in-law had interpreted “add a dash of salt” to mean “season liberally with red pepper flakes” and then set everybody’s tongues on fire at the dinner table.
What’s most important to note, though, is that in putting forward this proposed interpretation, the Labor Department didn’t say it wanted to change the actual text of New Jersey’s ABC Test itself. That’s something the Legislature has the power to do, and it is, in fact, what the same unionists first tried to get the New Jersey Legislature to do back in 2019, following California’s disastrous lead. New Jersey’s Legislature rightly shot down that idea after massive public outcry.
So now, with New Jersey’s Labor Department rulemaking, the unionists are taking another crack at the ABC Test. They’re trying to interpret and apply what’s on paper in ways that are causing all kinds of consternation.
New Jersey acting Labor Commissioner Kevin Jarvis, in an effort to defend the rule that the state Labor Department just adopted, is pushing the line hard in publications like Law360 that nothing is changing about the ABC Test itself:
“The final rule ‘does not change the law at all, does not change the ABC test in any way, shape or form, and anyone saying otherwise is simply misinformed and just wrong,’” said Jarvis, who is also Democratic Gov. Mikie Sherrill’s nominee for labor commissioner.
His argument is intended to persuade New Jersey’s legislators that they shouldn’t be concerned about the 200-plus-page rule that the Labor Department just dropped—200 pages about interpretation and application that, according to Jarvis, don’t change anything at all.
Does that sound plausible to you? Or do you think, just maybe, those 200 pages are intended to change the amount of salt in the recipe?
Try This Interpretation Yourself
The ABC Test is a three-part test with Prongs A, B and C. As just one example of what’s being debated, Prong C of New Jersey’s ABC Test currently reads: “Worker is customarily engaged in an independently established trade, occupation, profession or business.”
This means that to pass Prong C of New Jersey’s ABC Test, the independent contractor would have to meet that definition.
So, what do the state’s regulators consider sufficient to meet that definition? What is their interpretation and application of those words in Prong C of New Jersey’s ABC Test?
You might think, as a matter of common sense, that having a registered business entity like an LLC would satisfy the definition of being an established business.
Or you may imagine that holding a professional license in a trade would mean being customarily engaged in that trade.
But those beliefs would be your interpretation. As attorneys noted about Prong C of the ABC Test under this newly adopted New Jersey rule, the state is choosing to interpret and apply those words differently:
“Under Prong C, the final regulations still specify that holding a professional license, having multiple employers, registering a business entity, receiving a 1099 tax form, or carrying insurance are not individually sufficient to establish an independently established business.”
So what, then, would actually allow an independent contractor to pass Prong C of New Jersey’s ABC Test under this newly adopted rule’s interpretation?
It sure feels to me as if the Labor Department is saying the mashed potatoes may be properly salted, but not based on the use of table salt, sea salt, kosher salt, flake salt, Himalayan pink salt, black salt, smoked salt or chunks from a big ol’ salt lick.
‘They Just Weren’t Written Down’
Acting Labor Commissioner Jarvis also told Law360 that he can’t imagine why the state’s Legislature might need to take action now to stop this newly adopted Labor Department rulemaking, because:
“This is literally what we at the department have been using to enforce the law. They just weren't written down in regs.”
What our legislators need to understand is that what Jarvis said there may indeed be true—and incredibly problematic.
It is, after all, what numerous business and industry people have been complaining about for years. New Jersey’s Labor Department may have been interpreting and applying the ABC Test in ways the Legislature never imagined, understood or intended.
The Labor Department, with this newly adopted rule, may have simply admitted the quiet part out loud about just how far out of bounds its own interpretation and application of the ABC Test has already become—so far out of bounds that the original proposed version of this rule drew concern from Democrats who chair the New Jersey Senate Labor, Commerce and Government Oversight committees. They wrote:
“[U]pon reviewing the rule proposal, we are concerned that it departs from the existing statute and case law controlling worker classification.”
The Labor Department had also called that original, proposed version of this independent-contractor rule an attempt to codify its own interpretation of the ABC Test. To use the words Jarvis chose, it was arguably what the Department had already been doing.
If that’s indeed the case, then it’s well past time for legislators to step in and put a stop to this bureaucratic overreach. If regulators can use the ABC Test to threaten legitimate, mutually beneficial business relationships, then there’s a problem with the test itself, with the interpretation and application of the test, or both.
Hence the standing-room-only public hearing earlier this month in front of the New Jersey Senate Labor Committee, with all of us yet again asking our lawmakers to protect the state’s independent contractors and broader business community from this madness.
We’ve Seen this Tactic Before
This interpretation and application strategy we are seeing put into play in my home state of New Jersey right now is not new for the freelance-busting brigade. As I detailed in my recent “Extremism vs. Entrepreneurism” report, a unionist in the Obama administration tried a similar maneuver at the federal level more than a decade ago.
Lawyers didn’t hold back about the threat to legitimate independent contractors back then, either. They wrote things in 2015 that sound awfully similar to what we’re hearing lawyers say about what’s going on in New Jersey today, all based on an appointed bureaucrat’s interpretation:
“Purportedly spurred by the receipt of ‘numerous complaints from workers alleging misclassification’ and the history of ‘successful enforcement actions against employers who misclassify workers,’ the interpretation ignores decades of legal precedent concerning the classification of employees and independent contractors in a way that will now challenge many legitimate independent contractor relationships.”
That intepretation at the federal level in 2015 foreshadowed what’s happening in New Jersey right now. The federal interpretation came from an Obama Labor Department appointee named David Weil, who had previously written about independent contractors being a fundamental challenge to union organizing. A member of that same Obama administration team was Robert Asaro-Angelo, who would go on to become New Jersey’s labor commissioner and propose the state’s extreme ABC Test interpretation after a meeting in 2017 that unionists working with Weil coordinated.
Asaro-Angelo dropped his extreme interpretation of the ABC Test and then left office when the new administration of Governor Mikie Sherrill took over this past January. We all had hoped, at that point, that cooler heads would prevail. Sherrill could have just let this proposed rulemaking die.
But our new governor, who got elected with major support from Big Labor, chose to side against New Jersey’s smallest of small-business owners. Under Sherrill’s direction, the state’s Labor Department, now with acting Labor Commissioner Jarvis in command, finalized an edited version of the proposal that Asaro-Angelo had put in play.
This newly adopted independent-contractor rule is scheduled to go into effect October 1 unless the Legislature steps in to stop it.
To paraphrase what a parade of witnesses (including me) told our state Senate Labor Committee at a public hearing on May 11 that dragged on for hours, this adopted version of the rule still has way too much salt in the recipe.
This interpretation and application still threatens the incomes and careers of New Jersey’s estimated 1.7 million independent contractors.
We’ve Seen Gaslighting Before, Too
Between now and October 1, you’re going to hear a lot of people on both sides of this issue debating what, exactly, New Jersey’s Labor Department just did. The freelance-busting unionists are going to claim variations of “nothing changed with the state’s ABC Test,” while all the rest of us are going to keep banging home the point that this interpretation and application of the ABC Test regulatory language is simply untenable.
I know, it’s more frustrating than listening to somebody’s mother-in-law argue about mashed potatoes on Thanksgiving.
That’s why I recommend thinking about this debate from a more basic level. Instead of trying to understand the policy intricacies, just try to decide which side in the debate you should trust, based on how each side’s claims have panned out in the past.
Back in 2019, all of us independent contractors went to the State House and testified that New Jersey was trying to change our state’s ABC Test in a way that would copy California’s freelance-busting law, Assembly Bill 5. The unionists clapped back that we were all confused and hysterical. The top-ranking unionist in the Legislature, then-Senate President Steve Sweeney, went so far as to write an op-ed that compared us to Russian disinformation agents for even suggesting he might be trying to do such a thing. He insisted that we were dead wrong when we said New Jersey’s Senate Bill 4204 was trying to copy California’s Assembly Bill 5.
Sweeney even swore up and down that all he was trying to do was codify the existing version of the ABC Test in New Jersey. As Insider NJ reported in 2019, under the headilne “Senate Will Amend Employee ‘Misclassification’ Bill That Codifies Existing Regulations”:
“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,” said Senator Sweeney, the sponsor of the Senate bill. …
“The legislation is not the same as the California law.”
Today, we know that was all unionist gaslighting.
Don’t take my word for it. Read what the Sherrill administration just wrote about what happened back then, on pages 90 and 91 of the newly adopted independent-contractor rule:
“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.”
Virtually identical to California’s freelance-busting law.
The truth, it turns out, was exactly what independent contractors and the broader business community have been saying all along.
But wait—before you decide which side you should trust right now in Trenton, compare the way Sweeney described what he was doing in 2019 with what’s happening today. Sweeney assured legislators from here to eternity that he just wanted to codify existing regulations.
Now, look at what acting Commissioner Jarvis said earlier this month in testimony before the New Jersey Senate Labor Committee. As reported by the New Jersey Monitor:
“The rules do not change the law or the test,” Jarvis told the panel. “The analysis performed as part of the ABC test is no different since we adopted the regulations than it was before, meaning what was in place on May 4th remained in place on May 5th. The only thing we did was codify 90 years of case law and final agency decisions.”
Once again, the claim is that they just want to codify what already exists—the same language that Labor Commissioner Asaro-Angelo used when he dropped the extreme proposed version of this rule that the Sherrill administration just scaled back.
And lest we forget, the state merely wants to codify is also the same claim that then-California Assemblywoman Lorena Gonzalez made when she argued that California’s Legislature should pass Assembly Bill 5 because all it would do is codify a California Supreme Court ruling.
Now, Gonzalez—a card-carrying Teamster at the time, and currently the head of the California Federation of Labor Unions, AFL-CIO—failed to tell California’s legislators what eventually came out years later in a report by members of the California Advisory Committee to the U.S. Commission on Civil Rights. They noted in their report that none of the parties involved with the court ruling Assembly Bill 5 supposedly codified had actually proposed the adoption of this brand-new ABC Test in California. The California Supreme Court had just injected it into the case—in a ruling that cited the work of David Weil. Yup, the same David Weil who had issued the federal interpretation that threatened legitimate independent contractors.
Gonzalez pushed this kind of freelance busting into California law through that state’s Legislature and Assembly Bill 5 by saying this:
Assembly Bill 5 is necessary to codify what the courts have already ruled.
What we know today is that California’s Assembly Bill 5 didn’t just codify that court ruling; it expanded on it in ways that ultimately led California’s Legislature to carve out more than 100 professions. The version of the ABC Test at the heart of Assembly Bill 5 created too much chaos for businesses and legitimate independent contractors trying to operate in the state.
Now, watch what New Jersey acting Labor Commissioner Jarvis testified earlier this month as he defended the New Jersey Labor Department’s interpretation of the ABC Test. The language he uses is eerily similar to what Gonzalez said in California:
Most legislators trying to figure out whom they should trust in this debate are just like you: They likely don’t know the intricacies or backstories of the court rulings that any of these people are describing when they say they just want to codify what the courts have already ruled.
In New Jersey, for instance, legislators may not realize what actually happened with regard to the East Bay Drywall case that both the Murphy Labor Department cited and the Sherrill Labor Department cited as being fundamental to this independent-contractor rulemaking:
The New Jersey Supreme Court, in its 2022 East Bay Drywall ruling, relied in part on information from the 2019 Report of Gov. Murphy’s Task Force on Misclassification. The court referenced the Task Force Report on page 26 of its ruling, specifically with regard to the construction industry.
That East Bay Drywall ruling was handed down several years before it came out, in 2025, that there is mischaracterized data about the construction industry in that Murphy Task Force report.
The specific line of the Task Force Report that the New Jersey Supreme Court cited in its 2022 East Bay Drywall ruling is, according to the Task Force Report itself, based on work by the National Employment Law Project. It’s a progressive nonprofit in New York City whose highly questionable circular report-writing became the subject of fiery debate before the U.S. Congress in 2025.
Most recently, earlier this year, NELP lost a significant portion of its funding and began layoffs expected to cut the size of the staff by more than half.
Does that sound to you like the kind of organization or information we want our courts, agencies and state Legislature to be relying on to make independent-contractor policy?
I say once again, go with what feels true in your gut.
Which real-world effects do you believe will result if New Jersey’s rule is allowed to go into effect on October 1?
Do you believe that nothing is actually changing after the adoption of this 200-plus-page rule? Or do you believe that we’re watching a playbook being put into motion in New Jersey, yet again, attempting to follow California’s lead?
Final Considerations
There are a few more things you should take into consideration before you make your final judgment about which side you should trust in New Jersey’s independent-contractor policy debate:
The Murphy administration used mischaracterized data about far more than the construction industry in its Task Force Report about misclassification, a report that was used to get New Jersey to this point with the Labor Department rulemaking. Numerous unionists then cited that Task Force Report, along with other highly questionable research, in their public comments supporting this rulemaking. Opponents filed public comments explaining that there are serious problems with the Task Force Report. But the Sherrill administration, on page 192 of the adopted rule, wrote that “critique of the work of 2019 Misclassification Task Force Report is not relevant to this rulemaking.”
Economists documented in a public comment that New Jersey’s ABC Test is already having a disproportionate and negative impact on women. Those findings highlighted real-world consequences that mirror what members of the California Advisory Committee to the U.S. Commission on Civil Rights documented happening as a result of overly restrictive independent-contractor policy in that state. But the Sherrill administration, on page 183 of the adopted rule, stated: “The Department is not obligated to address economic research on the impact of “the ABC test…”
The only people who testified in favor of this rulemaking at last summer’s public hearing overseen by New Jersey’s Labor Department were either on a union payroll or affiliated with organizations that had strong union ties. A standing-room-only crowd outnumbered them 3-to-1.
The only written public comments in support of this rulemaking came almost entirely from that same unionist bunch.
That same bunch of unionists was yet again the only real source of support at the public hearing this month before New Jersey’s Senate Labor Committee, where acting Commissioner Jarvis was mingling with the head of the New Jersey AFL-CIO prior to giving testimony.
Now, make your decision.
Do you believe that New Jersey’s legislators would be wise to listen to the unionists and let this newly adopted rule stand?
Or should legislators listen to all the rest of us now and step in to block this rulemaking, just as they correctly listened to us back in 2019 and stopped our state from copying California’s Assembly Bill 5?
It’s OK to trust your own judgment here. After all, you don’t have to know anything about labor or employment policy to understand the difference between salt and pepper, and to realize that some people need to be thrown all the way out of our kitchens.