From Seyfarth Shaw‘s Wage & Hour Litigation Blog, Robert S. Whitman and Robert T. Szyba discuss the recent opinion by the New Jersey Supreme Court to apply the ABC test in wage and hour law cases. They note that it is easier now for independent contractors to challenge their classification under New Jersey’s wage and hour laws. They write:
“New Jersey employers now have an answer to a question that had previously been mired in uncertainty: What test is used to determine whether an individual is an employee or an independent contractor under state wage and hour laws?
In Hargrove v. Sleepy’s, LLC, the New Jersey Supreme Court, answering a question certified by the U.S. Court of Appeals for the Third Circuit, held that the “ABC Test,” taken from the New Jersey Unemployment Compensation Law, applies. Under that test, a worker is presumed to be an employee unless three elements—listed in subsections A, B, and C of the key section of the statute—are met.
Those factors are:
(A) the 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;
(B) the service is either outside the usual course of business for which such service is performed, or such service 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.
Unless all three criteria are satisfied, the worker will be deemed an employee…”
Read the full story at Employee or Independent Contractor? In New Jersey, It’s as Easy as “ABC”