The New Jersey New Jersey Motor Truck Association and Association of Bi-State Motor Carriers issue a joint statement on Thursday, joining the call for Gov. Mikie Sherrill and the Legislature to immediately reinstate the multi-factor economic realities test that was previously rescinded by Gov. Phil Murphy to best determine whether the criteria between freelance workers and employees.
The groups said returning the so-called IRS test would “restore a clearer set of criteria to ensure compliance for New Jersey businesses and the 1.7 million self-employed independent contractors who seek to work with them.”
Prior to 2018, the State of New Jersey used both the ABC test, and the more comprehensive, multifactor economic realities test to determine employee status.
Barely two months into his first term, however, Gov. Murphy directed the NJDOL to eliminate the IRS test and use only the more restrictive ABC test for Wage and Hour and Wage Payment determinations.
He did so despite strong opposition from supply chain stakeholders at the Port of NY & NJ, and without input from the Legislature.
Last May, Murphy again bypassed the Legislature and directed the NJDOL to introduce a new rule to codify a more challenging and highly subjective application and interpretation of the ABC test.
Despite receiving 99% public opposition to the proposed rule, which included evidence of misinformation and mischaracterized data, evidence of harmful economic consequences, and bipartisan concerns expressed by 24 lawmakers from both sides of the aisle, Gov. Sherrill adopted the policy last week.
“The cloud of uncertainty for businesses seeking to comply with classification laws has only gotten worse,” said Association of Bi-State Motor Carriers President Lisa Yakomin.
“We must work quickly to ensure this new rule does not harm New Jersey’s 1.7 million independent contractors, and the most efficient way to accomplish that is to reinstate the multi-factor economic realities test.”
Of particular concern, the groups said, is the impact the rule will have on the statewide supply chain if action isn’t taken.
“New Jersey is one of the busiest and most vital transportation hubs in the U.S,” New Jersey Motor Truck Association Executive Director Chris Lutick. “And truck drivers play an indispensable role in keeping essential goods moving throughout the region.
“Owner-operator drivers are independent contractors by choice, and their autonomy is at risk under this new rule.”
In written testimony to the Senate Labor Committee earlier this week, NJBIA Policy Analyst Jack Kelly also recommended the state’s usage of the IRS test as a possible solution to the challenges that are likely to be presented to New Jersey’s freelancers and the businesses that use them.
