August 3, 2020

Volume X, Number 216

August 03, 2020

Subscribe to Latest Legal News and Analysis

July 31, 2020

Subscribe to Latest Legal News and Analysis

New Jersey Court Further Limits Ability To Classify Workers As Independent Contractors

A recent ruling by the New Jersey Supreme Court in the matter Hargrove v. Sleepy’s, LLC has held that the strict “ABC” test must be used for determining whether an individual is an employee or independent contractor for wage and hour purposes. This is bad news for NJ employers who will now find it even harder to effectively classify workers as independent contractors. As a result of this ruling, employers should expect an increase in claims alleging that they have failed to properly pay wages and overtime to individuals misclassified as independent contractors.

Unlike other tests previously used for determining independent contractor status, the ABC test presumes all workers are employees unless it is shown that 1) the individual has been and will continue to be free from control or direction over the performance of their services; 2) such services are either outside the usual course of business or performed outside of the places of business of the presumed employer; and 3) the individual is customarily engaged in an independently established trade, occupation, profession or business. Unless all three requirements are met, the worker will be deemed an employee.

Employers should immediately review the practices and procedures they have in place for determining who is an independent contractor.

© 2020 Giordano, Halleran & Ciesla, P.C. All Rights Reserved National Law Review, Volume V, Number 49


About this Author

Ari G. Burd, Shareholder, Giordano Law Firm, Labor & Employment, Cannabis Law, Health Care

Ari devotes his time to assisting and defending employers with regard to traditional employment issues. He frequently counsels employers for compliance with New Jersey laws and has extensive transactional and litigation experience.

Ari has litigated employment matters throughout the state, having made appearances in almost every Superior Court in New Jersey, as well as before both Federal District Courts in New Jersey and the Federal and State Courts in New York.  These actions have involved a diverse range of claims such as wrongful discharge, discrimination, harassment,...