New Jersey Supreme Court Clarifies Criteria for Independent Contractors: Employment Law Manual Updated

Author: Michael Cardman, XpertHR Legal Editor

The New Jersey Supreme Court recently ruled in Hargrove v. Sleepy's, LLC, that the ABC Test must be used to determine whether a worker is an employee or an independent contractor under the state's overtime and wage payment laws.

Under the ABC Test, which is considered to be among the most employee-friendly of the various independent contractor tests, a worker is assumed to be an employee unless certain strict criteria are met.

The ABC Test was already in use for New Jersey's unemployment insurance and workers' compensation laws. An employer that had been applying different tests for different purposes should reevaluate each worker's status under the ABC Test and be prepared to reclassify any workers who may now qualify as employees.

The Independent Contractors: New Jersey section of the Employment Law Manual has been updated to reflect this development.

Additional Resources

How to Reclassify an Independent Contractor as an Employee