Protecting Workers from Misclassification
One of the most important issues facing workers today is misclassification—when employers call someone an “independent contractor” instead of an employee. Misclassification often denies workers critical rights like overtime pay, unemployment benefits, workers’ compensation, and the right to unionize.
In 2025, the New Jersey Department of Labor (NJDOL) proposed new rules to strengthen how the ABC test is applied. This test determines whether someone is truly an independent contractor or should be classified as an employee. For workers and unions across the state, these changes could mean greater protection and fairer treatment on the job.
🔎 What Is the ABC Test?
New Jersey uses the ABC test to decide whether a worker is an independent contractor or an employee. Under the test, a worker is considered an employee unless all three parts are proven by the employer:
According to NJDOL:
“To be considered an independent contractor, an individual must:
(A) be free from control or direction over the performance of the service;
(B) perform the service outside the usual course of the business for which the service is performed; and
(C) be customarily engaged in an independently established trade, occupation, profession or business.”
— NJ Department of Labor
If the employer fails to prove even one of these prongs, the worker must be classified as an employee.
⚖️ Why the ABC Test Matters for Workers
- Wages and overtime: Employees are guaranteed minimum wage and overtime protections, while contractors are not.
- Unemployment and disability benefits: Misclassified workers often lose access to unemployment or temporary disability insurance.
- Workers’ compensation: Contractors usually can’t access workers’ comp if injured on the job.
- Union rights: Employees can join unions and collectively bargain, while independent contractors generally cannot.
By strengthening the ABC test, New Jersey is making it harder for employers to misclassify workers and easier for workers to claim the rights they deserve.
📉 How Misclassification Hurts Workers
When workers are misclassified as contractors, they may face:
- Paying self-employment taxes out of pocket
- No access to paid leave or family leave protections
- Lack of employer health insurance or retirement contributions
- Greater job insecurity with fewer legal protections
According to NJDOL, misclassification “deprives workers of benefits and protections, reduces state income tax revenues, and creates an uneven playing field for businesses.”
👩🏭 What Workers and Unions Should Do
- Know the ABC test – If your work looks more like regular employment, you may not be a contractor under NJ law.
- Document your work conditions – Who sets your hours? Whose tools or equipment do you use? Are you working for just one company?
- Talk to your union – If you’re organizing, unions can help challenge misclassification.
- Seek legal help – If you’ve been denied wages or benefits because of misclassification, you may have a strong claim.
✅ Key Takeaway
The ABC test is more than just legal jargon—it’s a tool to protect working people from being exploited. With New Jersey tightening its enforcement, workers and unions have more power to push back when employers try to sidestep labor laws.
How Zirrith Law Can Help
At Zirrith Law, we stand with workers and unions across New Jersey. If you believe you’ve been misclassified as an independent contractor, our attorneys can review your situation, explain your rights, and fight for the wages and benefits you deserve.
📞 Call us today at 732 – 521 – 5900
📩 Or contact us online to schedule a confidential consultation.