UPDATE: Misclassification bill will not limit independent contractor status as significantly as first suggested; good news for small businesses, independent contractors and freelancers in NJ

By: Cristina N. Hyde, J.D.

Last month, our office acknowledged that some problematic amendments accompanied the efforts to codify New Jersey’s “ABC” test which businesses currently use to differentiate among employees and independent contractors.  You can read about the originally proposed changes to Senate Bill No. 4204 here.  While continuing to maintain focus on workers’ rights and preventing misclassification, Senate President Steve Sweeney has reconsidered one of the proposed changes in an effort to protect independent contractors and freelancers.  He has recently stated that language that was originally deleted from section (B) shall be reestablished; maintaining compliance if there is a showing that work performed by the individual is away from the company’s place of business. This change makes Senate Bill No. 4204 identical to its companion Assembly Bill 5936.   (https://www.njleg.state.nj.us/2018/Bills/A9999/5936_R1.PDF)

While this is good news for small businesses in NJ and offers more protection to independent contractors than originally anticipated, language that has been added to further restrict prong (C) remains intact and continues to require that the service performed by independent contractors be “of the same nature” as the individual’s independently established business.

Campanella Law Office continues to monitor the progress of this legislation.  Please contact us if you have any concerns as to how the bill will impact your small business.

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