New Jersey’s owner-operator law in limbo for now, but risk remains

Trucks on the George Washington Bridge entering New Jersey

New Jersey bills that would block trucking and other industries from using independent contractors are stalled, with the state legislature not scheduled to take up a vote on the issue through its current session.

But those battling the proposed law caution that the risk of leasing trucks from owner-operator drivers remains and the bills could still move forward in the next few weeks.

The bills, S4204 and A5936, would require New Jersey employers to follow the state Department of Labor’s version of the “ABC” test when determining whether to classify a worker as an independent contractor or as an employee.

State Sen. Steve Sweeney, the main sponsor of the legislation, said in an opinion piece the bills just codify the definitions and regulations that the state’s courts and regulators have used for years to classify workers.

He said the bills aim to give independent contractors the same legal protections and benefits afforded to employees and to prevent violations of minimum wage and overtime laws by employers. He added that “no one’s livelihood is being destroyed by this legislation.”

Yet the legislation remains unpopular within the trucking industry due to the inflexibility of the ABC test. Its second prong, that a worker be regularly employed in a profession outside of the employer’s usual business, is considered a particularly tough standard for trucking companies to meet, essentially forcing them to classify a worker as an employee.

Trenton political observers expected the bills to pass prior to the legislature’s upcoming winter recess. But neither bill was scheduled for this week’s Senate or Assembly sessions. Nor are they scheduled for any of the remaining sessions through the current legislative year, which ends Jan. 13.

If the legislature does not present a bill to Gov. Phil Murphy before then, the legislation would essentially have to start from scratch.

Alida Kass, president of the New Jersey Civil Justice Institute, said the bills do appear to have stalled, but “as always, that could change.”

“I have no doubt [the bills’ sponsors] are still trying,” Kass said. “But the word is that it’s not going to happen in the lame duck session.”

The Senate’s version of the bill, S4204, was amended to reflect the Assembly version of the bill, passed through the labor committee, and is ready for a floor vote. The Assembly version, A5936, still has to go through an appropriations committee hearing before being put to a floor vote.

“The bills have stalled, but they are not dead,” said Lisa Yakomin, president of the Association of Bi-State Motor Carriers. “There’s still plenty of time to move the bills through the legislature before the end of the current session.”

The legislature “certainly put it aside for now,” she added. “But I expect that if they can, they will move it in the new year.”

The Bi-State Motor Carriers started a petition that has gathered nearly 10,000 signatures against the legislation. But Yakomin credited outreach to industries beyond trucking for keeping the law at bay.

“Port trucking has been dealing with this for several years, the push to eliminate or limit independent contractors,” Yakomin said. But “the first version of the bill was so inclusive of so many industries, it got the attention of independent contractors throughout the state.”

Outside of trucking, a group called Fight for Freelancers is highlighting the effect of the law on writers, photographers, graphic artists, public relations experts, healthcare practitioners, teachers, massage therapists, translators and those in similar professions.

New Jersey’s bill is modeled largely after California’s AB5 legislation, which will go into effect next year. One tangible result of AB5’s passage has been that sports website will no longer use independent contractor writers in California. Instead they will be replaced by a smaller pool of employee writers.

Along with building a broader coalition to oppose the bill, Yakomin and others have also shifted the fight away from Trenton by bringing it home to local municipalities as well. The New Jersey towns of South Orange and Washington Township sent letters to Sen. Sweeney voicing their opposition to the bills, while the city council of Woodcliff Lake passed a resolution opposing S4204.

“Now that we are aware of all the industries that are affected, not just trucking, we need to give these folks a seat at the table and hear their stories,” Yakomin said.