09 Jan I’m a gig worker. What would make me an employee?

Q. What’s the latest with legislation that would reclassify gig workers? I want to remain an independent contractor and not be considered an employee.
— Freelancer

A. The state Labor Department previously put out a report that said many workers are misclassified as freelancers or gig workers rather than regular employers. This deprived workers of certain rights, including the ability to earn overtime or have paid time off, it said.

There’s been a lot of back and forth on this in Trenton.

In 2025, the governor signed legislation that would penalize firms that misclassify workers intentionally. It received a lot of pushback by the business lobby.

But another bill that would have reclassified many workers who are currently independent contractors didn’t move ahead. Whether that will be pursued further remains to be seen as it, too, was opposed by the business lobby and certain independent workers who do not want to be considered employees.

Here’s where it all stands per the Labor Department website:

It says an “employee” means any person working for an employer, except for independent contractors.

“Employees are protected by many labor laws in New Jersey, including the Unemployment Compensation Law. Independent contractors do not receive such protections. That is why it’s so important to make sure workers are properly classified,” it said.

If your employer issued you a 1099 instead of a W-2, that alone does not mean that you are properly classified, it said.

That’s where the so-called “ABC” test comes in.

Again, from the Labor Department website, a worker should be considered an employee unless all the following circumstances apply:

A: The individual has been and will continue to be free from control or direction over the performance of work performed, both under contract of service and in fact; and
B: The work is either outside the usual course of the business for which such service is performed, or the work is performed outside of all the places of business of the enterprise for which such service is performed; and
C: The individual is customarily engaged in an independently established trade, occupation, profession or business.

It further explains each part of the ABC test:

PART A: Does your employer direct or control how you perform assigned work? Direction and control can include the following:

• Giving instructions
• Providing training
• Setting your work hours
• Telling you what tools or supplies to use while performing your work
• Hiring assistants
• Specifying your responsibilities
• Informing you of the sequence of your work (telling you to do certain things in a particular order)
• Having the right to fire you
• If your employer exercises direction and control, then part A of the ABC test can not be met.

PART B: Is the work that you do for your employer 1) substantially different from their usual course of business, or 2) performed outside of their usual place(s) of business?

Example for part 1: A worker installing a fence at a law firm’s office would be engaged in a different service than those usually provided by the law firm itself – unlike, for instance, a paralegal hired to assist lawyers in the office.

Example for part 2: The facilities where physical and occupational therapists perform services – which are arranged through staffing contracts with the facilities – are considered integral parts of the business.

If the work you do for your employer is similar to or the same as the business they usually conduct, or the work is performed in a location/locations where they typically do business, part B of the ABC test can not be met.

PART C: Are you engaged in an independently established trade, occupation, profession, or business that could operate separately and apart from your employer? Many factors influence whether work can exist separately and apart from the relationship with your employer, including – but not limited to:

• The amount of work and length of time worked for the current employer
• The number of workers employed by such individual
• Whether the individual pays its own expenses
• Whether the individual works for more than one person or firm
• Whether the individual uses its own tools, equipment, vehicles, or other materials
• The number of other customers and volume of business from other customers
• The amount of work received from the current employer compared to the amount of work received from others for the same services

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This story was originally published in January 2026. 

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