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One to Keep An Eye On: S4204 (New Jersey Legislature)


As with many employment and labor law related cases (and bills) being litigated around the country, there are always a few that stand out.  This is one to keep an eye on.


A few weeks ago, a bill was introduced in the New Jersey Legislature which would codify a new standard to determine whether a worker is an independent contractor or an employee.  

Readers will recall that earlier this year, California codified its ABC test...much to the chagrin of gig companies that operate in the state. Now, like California's AB 5 which codified the ABC test, New Jersey's proposed legislation, S4204, would codify the ABC test in the state but also go one step further.  The ABC test currently stipulates that a worker is considered an employee of the company unless:  A) The individual is free from control or direction over the performance of services; B) The service is either outside the usual course of the business for which it is performed, or the service is performed outside of all the places of business of the enterprise for which it is performed; and C) The individual is customarily engaged in an independently established trade, occupation, profession, or business.  Readers should make note that the ABC Test places the burden on the company, rather than the worker.

However, S4204 would amend prong "B" in so much that a company would only be able to satisfy this prong by showing that the work performed by the individual is outside the company's usual core business. Of note, S4204 would make it more difficult for companies in New Jersey to classify workers as independent contractors rather than employees.  As well, prong "C" would be amended in so much that an individual must provide the company with the same type of services he/she provides in that profession or trade.

With Democrats in control of the New Jersey Legislature (and with a Democratic Governor in place), S4204 might have the legs to make it through and become law.  Stay tuned.



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