Federal DOL Finalizes Rule on Misclassification of

Workers as Independent Contractors

The New Jersey State AFL-CIO commends the U.S. Department of Labor and the Biden Administration for assisting both workers and businesses in being in compliance with wage and hour laws governing worker status by issuing these guidelines. This rule also rescinds the Trump era regulation.

Last week the final rule was published and it will take effect on March 11, 2024. The details of the new rule can be found HERE.

The rule provides guidance to employers on proper classification and seeks to combat employee misclassification, which not only makes workers ineligible for various protections and benefits (UI, paid family leave, overtime, TDI, etc), but also places employers that fairly classify workers as employees at a financial disadvantage with their competitors that benefit by exploiting the law to reduce labor costs and increase profits.

It should be noted that intentionally misclassifying workers by employers strips those workers of their ability to unionize, since independent contractors are not covered by the NLRA.

Organized labor in New Jersey has long partnered with state level policymakers and elected officials to promote laws and implement standards governing independent contractors. The Murphy Administration has been at the forefront of this issue and New Jersey is often considered as having one of the best misclassification laws in the nation.

Even though this federal rule has been approved, New Jersey will continue to apply the “ABC test” to determine worker status as well. Details regarding this test can be found HERE.

Thank you again to the Biden Administration for implementing this rule that will go a long way toward promoting fair adherence to worker classification.

In Solidarity,