New Jersey DOL Proposed IC Rule

 Understanding New Jersey’s Proposed Rule 1211 and Its Impact on Independent Contractors.

New Jersey’s Department of Labor (DOL) has introduced a proposed rule that may significantly change how independent contractors are classified in the state. Known as Rule 1211, this proposal would formalize the use of the ABC test, a legal standard for determining whether a worker should be treated as an employee or as an independent contractor.

While this might appear to be a technical adjustment, the potential consequences are substantial. Thousands of individuals across New Jersey rely on the flexibility and autonomy that come with independent contracting, and this rule could limit their ability to maintain that status.

What Is the ABC Test?

The ABC test is a legal framework that determines whether a worker is an employee or an independent contractor. Under this test, a worker is presumed to be an employee unless all three of the following conditions are met:

1. The individual is free from control and direction in performing the work, both under the contract and in practice
2. The work is performed outside the usual course of the hiring entity’s business
3. The individual is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed

If a worker fails to meet any one of these criteria, they would be classified as an employee.

Why Does This Matter?

Independent contracting provides essential benefits to many individuals. It allows for flexible schedules, personal autonomy, and the opportunity to build and manage one’s own business. For workers in fields such as transportation, delivery, consulting, and freelance services, this independence is often a central part of their livelihood.

If Rule 1211 is adopted in its current form, many workers may no longer qualify as independent contractors. This change could affect a wide range of professionals, including:

• Freelancers and small business owners
• Independent delivery drivers and couriers
• Consultants and remote professionals
• Entrepreneurs offering service-based work

Being reclassified as an employee may limit flexibility and affect how these individuals manage their businesses and income.

How You Can Respond

Stay informed. Learn about Rule 1211 and how it could affect your work or business. Resources are available through the New Jersey Department of Labor and organizations such as Openforce.

Share your voice. During the public comment period, individuals and businesses can provide feedback on the proposed rule. This is an opportunity to express how the change may impact your work or industry.

Review your classification. Whether you are a contractor or work with independent professionals, take time to evaluate how the ABC test may apply to your current arrangements.

Moving Forward

As workforce models evolve, it is more important than ever to remain aware and engaged. The proposed Rule 1211 could restrict how many people in New Jersey choose to work and run their businesses. At Openforce, we support a future where workers have the right to choose the path that works best for them.

To explore the details of this proposal and learn how to take action, visit oforce.com/nj-dol-rule-1211.