The Garden State Initiative (GSI) has raised concerns about a proposed rule from the New Jersey Department of Labor that would broaden the state’s “ABC test” for worker classification. According to GSI, this change could limit flexible work options and affect freelancers, caregivers, and small business owners throughout New Jersey.
The proposed rule aims to reclassify many independent contractors as employees by expanding what counts as employer control. For example, requiring insurance or using digital platforms could be considered signs of employer control. The rule would also redefine a worker’s own vehicle or a client’s home as an employer’s place of business and dismiss traditional indicators of independence such as holding professional licenses, receiving 1099 forms, or working with multiple clients.
“Independent contracting is not a loophole—it’s a legitimate career choice that millions of Americans value for its flexibility and autonomy,” said Audrey Lane, President of GSI. “New Jersey should learn from California’s experience, where broad reclassification forced thousands of workers out of business and created unnecessary exemptions. Our state can protect workers and expand benefits without eliminating the independence that freelancers have chosen. We urge policymakers to pursue smart, flexible solutions that empower New Jersey families, not constrain them.”
Flexible work arrangements are important in New Jersey for parents managing childcare responsibilities, retirees supplementing their income, and professionals handling multiple projects.
GSI points to California’s Assembly Bill 5 (AB5), enacted in 2020 with similar goals. After AB5 was implemented, studies found that one in ten independent contractors lost work opportunities. Lawmakers responded by creating over 100 exemptions due to economic disruptions, resulting in a complex system that impacted small businesses and workers.
GSI also notes that nearly all public comments—99%—submitted on the proposed New Jersey rule were opposed to it.
According to GSI, those most affected by the changes would include parents needing flexible schedules; retirees doing part-time consulting; immigrants and minorities entering the workforce through gig jobs; and independent professionals who rely on autonomy.
To address these issues while still protecting workers, GSI recommends developing portable benefits for independent workers, targeting real abuse rather than broad restrictions, and encouraging innovation in work models.
Surveys cited by GSI indicate that 84% of full-time independent workers report higher satisfaction compared to traditional employment roles. More than half say they would not return to standard jobs if given the choice. GSI argues that forcing these workers into rigid employment structures may increase costs and reduce opportunities—especially for women, minorities, young people, and others seeking upward mobility.
GSI urges policymakers to reject the proposed rule in favor of policies supporting worker empowerment and entrepreneurship while maintaining New Jersey’s competitiveness.
