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The basics:

• NJDOL proposal would redefine independent contractor status under ABC test
• Bipartisan lawmakers plan legislation to block the new rules
• NJBIA warns changes would hurt flexibility and raise business costs
• Murphy says proposal remains in stakeholder engagement phase

The proposal of new rules pertaining to independent contractors here in New Jersey continues to draw attention around the state — and certainly within the business community.

NJBIZ reported last week about the topic, as the New Jersey Department of Labor and Workforce Development recently held a hearing and opened public comment about the proposal. The plan would re-interpret the ABC test, which is used to determine whether a worker is an independent contractor – or gig worker – versus an employee.

The topic has drawn fierce debate on both sides – with a continued drumbeat of passion and attention on the issue, even throughout the usual sleepy summer months.

The public comment period recently closed.

This has also, notably, drawn opposition from lawmakers on both sides of the aisle.

A ‘misguided attempt’

On Aug. 12, Republican lawmakers from the 13th District (Sen. Declan O’Scanlon, Assemblyman Gerry Scharfenberger and Assemblywoman Vicky Flynn) announced their intention to introduce legislation that would declare the new rules inconsistent with legislative intent – if the labor department does not pull or modify the proposal.

“This is yet another misguided attempt by the Murphy administration to overregulate New Jerseyans out of their livelihoods,” said O’Scanlon. “These proposed rules by the DOL directly contradict the Legislature’s intent and would wreak havoc on independent contractors who rely on flexibility and autonomy to make a living.

“That’s why I’ll be introducing legislation to declare these rules inconsistent with legislative intent and stop them before they do serious harm if the DOL doesn’t respond to the public outcry and significantly modify or entirely rescind the proposed rule changes,” O’Scanlon continued. He cited Article V, Section IV, paragraph 6 of the state constitution, which allows the Legislature to review any rule or regulation adopted or proposed with the Legislature’s intent, as expressed in the statute it aims to implement. “The livelihoods of countless New Jerseyans are on the line.”

More transparency needed

In response to that announcement, Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, said her organization thanks the “responsive lawmakers for announcing this much-needed resolution, which we will fully support when it is formally introduced.”

NJBIA has been on the frontlines of this issue, in opposition to the proposal.

“NJBIA has been working closely with businesses, as well as independent contractor advocates, to ensure that this misguided proposal does not go forward,” said Siekerka in an Aug. 12 statement. “We thank the greater business community for allowing their impassioned voices to be heard through constant communications with their legislators.”

Siekerka said that NJBIA looks forward to seeing continuing bipartisan support for this effort.

“As we have stated since May, NJDOL’s proposal is not merely a codification of current ABC rules – it’s a complete overhaul of the regulations that will drastically reduce the flexibility and economy of independent contractors and greatly add to the costs and efficiencies of New Jersey businesses,” said Siekerka. “To address worker misclassification, we continue to urge the Department to engage in a more transparent, balanced, and evidence-driven process that supports both worker protections and economic freedom.”

Hands off

During a press gaggle following an Aug. 13 bill signing in Kearny, NJBIZ asked Gov. Phil Murphy about the hot-button issue.

“Governor, an issue that’s been getting a lot of attention is this proposed rule change around independent contractors and gig workers. Wanted to get your thoughts on the proposal itself and any reactions to the pushback?” NJBIZ asked.

“It’s in a sort of stakeholder engagement phase right now,” said Murphy. “And I’m going to probably stand back and allow that process to play out. I know there’s a lot of passion on all sides of this – and I’ve heard it directly myself. But let’s let this play out – and God willing, it’ll land in a good place for workers and for our economy.”

Please stay with NJBIZ for the very latest developments on this story.