NJBIA President and CEO Michele Siekerka issued the following statement regarding the Sherrill administration upholding its codification of the most stringent version of the ABC test in the nation, after a 120-day stay when no statutory changes were made. 

New Jersey’s Department of Labor and Workforce Development proposed the rule, which is similar to California’s disastrous AB-5 rule from 2019, under Gov. Phil Murphy in 2025. 

NJDOL adopted the rule under Gov. Sherrill, despite 9,500 comments opposing it during the rulemaking period and, since then, another 2,000 letters from impacted freelancers, nonprofits and businesses, as well as legislators from both sides urging its delay. 

“Implementing the ABC rules in their current overreaching form is another hit, and an unnecessary one at that, on New Jersey’s job creators.

“Right now, we are experiencing extensive job loss in New Jersey, resulting from continuing WARN notices and a persistent stretch of large employers choosing to leave our state, taking thousands of jobs along with them. Moreover, we are ranked as the last state in the nation for business climate and friendliness.

“This action adds to the lack of predictability and certainty that New Jersey job creators need to do business and it gives hard-working, entrepreneurial freelancers something they never asked for – a regulatory mountain to climb to be an independent contractor in New Jersey.

“The result is a system that picks winners and losers. Those with the resources and access to secure a legislative exemption may be protected, while independent contractors and small businesses without a seat at the table are left to pursue their entrepreneurial goals under continued legal and regulatory uncertainty.

“NJDOL has dismissed this adoption as merely the codification of already existing regulatory actions and behavior, when, in fact, it is now leaving open an overly broad interpretation of an ABC framework from nearly a century ago. In New Jersey, this is now the legal default, and a virtually impossible standard to meet, without any acknowledgement of the realities of the modern gig economy.

“An already tepid business community will now be reluctant to engage legitimate independent contractors as they traditionally have, while many will not have the financial ability to bring those same workers on as employees.

“We remain extremely concerned about Prong B of the ABC test, which requires a business to demonstrate that an independent contractor’s work is performed ‘outside the usual course’ of the business or outside of its places of business.

“This one provision, which the Sherrill administration adopted and declined to change during the 120-day stay of the implementation, represents an incredibly onerous threshold for many legitimate independent contractor-business relationships to overcome.

“Rules can be changed, and we welcome the opportunity to work with the administration and the Legislature toward a compromise that protects legitimate independent contractors while providing businesses with the clarity and certainty they need.

“But after years of concern from the business community, thousands of public comments in opposition, legislative carveout attempts that demonstrate in plain sight what is wrong with the rule, and growing bipartisan opposition from legislators, it is deeply disappointing that it is nevertheless poised to take effect.”