After four hours of committee testimony from freelance workers, businesses and union representatives yesterday on the controversial independent contractor rule adopted by the Sherrill administration last week, one wonders what the next steps might be.
Speaking to Bill Spadea on his top-rated morning radio show on Tuesday, NJBIA President and CEO Michele Siekerka said there needs to be an understanding on how far the Legislature is willing and able to go to stop or alter the rule - which makes it much more difficult to be an independent contractor in the state.
“Our message is and has been that this (rule) is oversweeping and what we need right now is the Legislature to do is step in and nullify, invalidate, just knock these rules right out,” Siekerka said.
“But I'm going be honest - that's going to be very difficult. That's like the Legislature coming in and just kind of overruling the governor right now, and these folks are still figuring out their relationship.”
Over the past year, NJBIA has been the leading business voice opposing sweeping changes to the criteria of the ABC test that determines whether a person is a freelancer or an employee.
After the proposal, made by the Murphy administration last year, yielded 9,500 comments in opposition to it, Senator Declan O’Scanlon, Assemblyman Gerry Scharfenberger, and Assemblywoman Vicky Flynn (R-13) introduced legislation stating that the rule would be inconsistent with legislative intent, should it be adopted.
Additionally, 24 legislators from both sides of the political aisle, including some on the Senate Labor Committee, urged NJDOL to abandon the proposal.
Siekerka lauded the committee for hosting a discussion on the controversial rule just six days after it was adopted, and recommended that further discussions, and data, are needed if such an onerous rule is needed to address misclassification, as both the New Jersey Department of Labor and union groups testified on Monday.
NJDOL Commissioner Kevin Jarvis stated in his testimony that 1,400 gig workers had applied for unemployment benefits over the past two years.
Freelancer advocate Kim Kavin, however, noted that was far from enough reason for wholesale changes in the rule.
“We live in a state with 1.7 million independent contractors,” she said. “Making any policy on 700 claims that may or may not be valid, is ridiculous.”
Siekerka concurred.
“Look, if we want to go about for some solution about misclassification, let's understand, number one, where is misclassification happening,” Siekerka told Spadea. “Because that's also been overinflated
“We know there are some industries where this happens more than others. So why have this broad test that sweeps everybody in, brings all the good guys in with those potential bad guys out there?
“Let's understand where the issue is that they're trying to bring a resolution to because this is a solution in search of a problem as it currently exists. Let's have an honest discussion about how we can figure out who's truly misclassifying, why workers are allegedly being classified and how widespread the issue actually is.”
Siekerka also echoed the call from NJBIA Policy Analyst Jack Kelly made in his testimony on Monday for New Jersey to consider reverting to the federal IRS test determining worker classification, which many states use.
“With these rules right now, the burden on the employer to show that someone's an independent contractor is almost impossible,” Siekerka said.
