New Jersey businesses will now face an increased slate of potential penalties for misclassification violations thanks to a series of bills just signed into effect by Governor Phil Murphy, but gig economy companies can breathe a sigh of relief because lawmakers declined to adopt a large-scale misclassification California-like law that could have seen tens of thousands workers classified as employees instead of contractors. The six bills signed into effect last week emerged from a worker misclassification task force, but thanks in part to the controversy that has plagued California’s AB-5 – which codified the infamous ABC test and has caused countless headaches in workers and businesses alike – the state decided not to pursue a proposal that would have approached that same territory. But the reprieve may only be temporary: lawmakers and worker advocates alike are already heard at work in the 2020 legislative session to pass a modified ABC test that would upend the current classification structure.
Things were starting to get dicey in the Garden State as the legislature debated a California-like proposal that would have caused serious problems for gig economy companies and other businesses utilizing contract labor. But a measure of good news emerged last Friday as Senate leadership announced there would be changes to the draft legislation to protect a greater number of independent contractors. While we still cannot be sure about the extent of the changes and whether the resulting amendments will permit the typical gig economy company to continue business-as-usual, there is reason for optimism that the state will look to balance both the interests of workers and the needs of business when it comes to legislation in this area.