As a result of a recent New Jersey Supreme Court ruling, New Jersey businesses will be subject to much stricter scrutiny when it comes to classifying workers as independent contractors. In the case, Sam Hargrove, et.al.v Sleepy’s LLC, the court concluded that the “ABC” test under the New Jersey Unemployment Compensation Act will be used to determine a worker’s status for claims under both the WPL and WHL and not the FLSA’s economic realities test.
| NJ ABC Test | Worker is Independent Contractor if all of these apply: |
| A | Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and |
| B | Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and |
| C | Such individual is customarily engaged in an independently established trade, occupation, profession or business. |