The board list for December 16th was released this Wednesday, and at least as of now, S4204 is not on it. It also was not on yesterday’s Assembly Appropriations committee agenda.
And while linked pieces of legislation, there are still several substantive differences between S4204 as released from Senate Labor on December 5th, and the A5936 as released from Assembly Labor November 18th.
Although advocates continue to argue that the legislation would merely codify “existing law,” it would be more accurate to say the legislation would codify the Department of Labor’s interpretation of existing law.
However, there are substantive changes to the so-called “ABC” test that depart from the interpretation that the NJ courts have applied to the law.
The proposed legislation eliminates language that recognizes contract work of those engaged in a “trade, occupation, [or] profession” is deleted – contract status is instead limited to an established “business or enterprise.” While the DOL has been reversed by the courts on this point, the legislation would codify the DOL interpretation. Such a change would affect the working arrangements of the freelance journalists, graphic design artists, speech therapists, and the host of other freelance professionals who showed up to testify against this legislation last week.
The legislation also adds the additional restriction that the “business or enterprise” must be “of the same nature as that involved in the work performed.” This change would affect the availability of “side gig” contract work – another point on which the Department of Labor has brought a more restrictive interpretation than the courts. In Garden State Fireworks, for example, DOL insisted that such an arrangement “does not equate to an independently established enterprise or business.”
Again, the appellate division rejected that interpretation as an unreasonable, arbitrary and capricious reading of the law. The court emphasized that an individual otherwise fully employed could lose side contract work without any risk of their becoming unemployed, that it was independently established and therefore consistent with established law. Teachers, police officers, retirees, and stay at home moms, among others rely on such side work to make extra money or just maintain contacts within their chosen profession. S4204 would codify the rejected DOL interpretation and eliminate this flexibility.
The Department of Labor has also brought an unreasonably narrow interpretation to the requirement that work be performed “outside all the places of business” of the business – arguing that the “place of business” is essentially anywhere the worker goes to perform work. The Court has emphatically rejected this DOL approach, pointing out that such a circular analysis would be a test no one could pass.
But because the proposed legislation requires that the satisfaction of the “ABC” test meet with “the satisfaction of the Commissioner of Labor” – it functions essentially as a new grant of rulemaking authority, creating a fresh statutory basis to implement its preferred interpretation. The DOL interpretation on “place of business” would affect a wide array of contract work, from the live band that plays at The Stone Pony to the wedding photographer whose work inescapably must be done at the wedding in question.
In short, the proposed legislation does far more than simply
codify existing law. But we welcome the
opportunity to work on language that would actually accomplish the stated
objectives, preferably in the next legislative session.