New Jersey ABC Test Rule Takes Effect, Codifying Strict Independent Contractor Standard

New Jersey's independent contractor regulation took effect October 1, 2026, codifying the ABC test for determining worker classification. The rule applies statewide with no industry carve-outs, unlike California's AB5, which included numerous exemptions. The ABC test requires workers to be free from company control, perform work outside the hiring company's usual business, and operate an independently viable trade. Attorney Richard Reibstein of Littler Mendelson said the final rule is "more moderate" than the April 2025 proposal but still imposes "one of the most business-unfriendly tests for IC status in the country." New Jersey Chamber of Commerce CEO Tom Bracken criticized the lack of a "clear, consistent and workable standard." NJBIA CEO Michele Siekerka called it "a virtually impossible standard to meet." Reibstein noted the regulation also affects nationwide companies engaging New Jersey-based workers, including those working from home offices.