State rules for independent contractors are ‘onerous,’ confusing

Working people in New Jersey are getting squeezed from every direction.

The cost of groceries, housing, healthcare, utilities, and almost everything else remains too high. Federal policies like tariffs are making countless goods more expensive. And something quieter but just as consequential is happening in the workplace: Union organizers are pushing policymakers to limit our available pathways to achieve the American dream.

For generations — every generation, actually, since the day the United States was founded — we have all had the option to be our own bosses. George Washington worked for himself as a land surveyor. Alexander Hamilton opened his own shop as a lawyer. The tradition of being able to work in whatever ways work best for us has always been part and parcel of liberty and the pursuit of happiness.

Increasingly, some unionists want a different arrangement: The government should give union organizers unprecedented power to target independent contractors. These unionists want to codify an ever-growing universe of so-called “worker protections” into law that are actually attacks on the ways we can legally earn a living.

That should concern every working person in New Jersey.

One way that unionists are pushing to restrict this freedom right now in our state

is the Department of Labor & Workforce Development’s newly adopted ABC test, which regulators use to determine whether someone should be classified as an independent contractor or a unionizable employee. If an independent contractor can’t pass this ABC test the way the Labor Department is interpreting it, then the company working with the independent contractor is subjected to fines and penalties.

Last year, when the Department of Labor first proposed this rule, the interpretation was so severe that attorneys said it would almost entirely eviscerate anyone’s ability to be an independent contractor at all. They wrote that the ABC test rule posed an existential threat to independent work itself. About 9,500 written public comments were filed, with 99% of them opposed. The only people who testified in support at the standing-room-only public hearing were either on a union payroll or affiliated with organizations that have strong union ties.

The version of the ABC test rule that the Labor Department just adopted is scaled back, but it’s still so onerous that on October 15, the Senate Judiciary Committee spent nearly two hours asking acting Labor Commissioner Kevin Jarvis how anyone can actually pass the test. Democrats and Republicans alike said they were being hammered daily with calls from every conceivable industry — insurance, performing arts, amateur sports — because nobody can figure out what to do.

One senator said he convened a group of accountants to gain some clarity, but they all gave him different answers. Laughter erupted in the chamber when Jarvis couldn’t seem to give a straight answer on how a business trying to comply could get the information required to do so. Yet another senator asked if there was going to be a Division of ABC Test Clarification to help everyone make sense of what’s going on.

New Jersey AFL-CIO President Charlie Wowkanech describes what’s happening with the ABC test as “expanding and protecting the freedom of workers to join unions for a better life.” It’s actually threatening the incomes and chosen careers of our state’s estimated 1.7 million independent contractors to try and give a bigger honeypot of targets to union organizers.

Don’t let the headlines about Uber and Lyft fool you. What’s happening with New Jersey’s ABC test rule is some of the most extreme policymaking in the country. During the public-comment period for the ABC test rule, research that supporters cited raised many questions. The Workplace Justice Lab at Rutgers University used footnotes to cite research that also compares independent contractors to human trafficking, child labor, and workplace violence — literally comparing entrepreneurial effort to violent crime.

These are extreme views. And yet it’s the extremists the Sherrill administration sided with when it defied the public’s 99% opposition and pushed the regulations through. It did so with strong support in particular from Wowkanech and the New Jersey AFL-CIO, which is Jarvis’ former employer. Wowkanech testified during the recent judiciary committee hearing that Jarvis is his “dear friend.”

A basic principle behind New Jersey’s labor and employment laws is as necessary as ever: We all should be able to work in whatever ways work best for us, whether that’s as a union employee, a nonunion employee, an independent contractor, or a combination that includes a side hustle. Especially at a time when it’s increasingly hard to pay grocery and gas bills, everyone should have the freedom to choose any kind of work we want.