On behalf of our member companies that provide over one million jobs and make NJBIA the largest statewide business association in the nation, we write to express our concerns with A-4735. While we support this bill conceptually and any step to assure proper classification for the estimated 1.7 million Independent Contractor’s that choose New Jersey as their home, NJBIA respectfully urges the Legislature to shift their thinking away from one-off solutions like this bill and consider delaying the implementation of the ABC Test until July 2027 to truly and permanently fix it for all independent contractors.
Back in 2019, the ABC Test’s expansion was considered by the New Jersey Senate and Assembly but ultimately failed to be enacted into law. Similar efforts were made in California with AB5, and federally with the PRO Act. While California’s ABC Test was signed into law, they quickly realized that a blanket classification framework that originated in 1936 could not fit the gig economy of today.
Thus, California went through the painstaking process of hundreds of individual carveouts, developing alternative frameworks for certain professions, and when that was not enough, the people passed a voter-approved ballot measure to deal with the Rideshare industry. And, years later, litigation continues. While well-intentioned this bill can be seen as a start to that awful process in New Jersey that inherently will leave out legitimate contractors.
Federally, the Pro Act is at a standstill. And just like in New Jersey, when the legislature failed to pass this framework through the legislative process, the USDOL attempted to do what the NJDOL did, taking the approach of administratively codifying rules based off of isolated cases and cherry-picked interpretations of the ABC test. Those efforts were struck down as unconstitutional.
Fast forward to today, the USDOL is refocusing on a more streamlined, two-factor approach emphasizing operational control and the opportunity for profit or loss. Effectively going in the exact opposite direction New Jersey is headed.
California’s experience should be learned from. Not only were there drops in W-2 employment, self-employment, and overall employment, Members of the California Advisory Committee to the U.S. Commission on Civil Rights cited findings stating that “AB5 disproportionately and negatively affects women, immigrants, people of color, and the politically powerless.”9,500 public comments were filed in 2025 during the NJDOL’s rulemaking process about their proposed rules with 99% in opposition citing the same concerns that have been cited since the inception of this fight. When you ask to hear from the people, we argue that you have, and that the NJDOL has ignored them.
While we understand the political pressures at stake in this fight, there is not a single industry that does not benefit from the flexibility independent contractors provide. Just as importantly, independent contracting is not a one-sided arrangement that benefits businesses at the expense of workers. Many independent contractors choose this model because it provides them with greater autonomy, flexibility, control over their schedules, and the ability to build their own businesses and pursue multiple sources of income. A workable independent contractor framework should protect workers from genuine misclassification without eliminating legitimate independent work that benefits both businesses and the individuals who choose it.
And while there are bad actors out there that skirt the law and intentionally misclassify their employees, the NJDOL has demonstrated that they already possess the tools necessary to enforce employee misclassification.
We appreciate this bill’s attempt to provide certainty for this group of legitimate independent contractors and recognize the important role that officials play in supporting Little Leagues, recreational leagues, and other community sports programs across New Jersey. However, the concerns surrounding independent contractor classification extend well beyond any one profession or industry. NJBIA is asking the New Jersey State Legislature to take control of this process and delay implementation of the ABC rules for independent contractors, establish a balanced task force to study this issue until July of next year, and revisit the matter when we can be fully informed of its impacts on the Garden State.
