New Jersey – New Jersey Governor Mikie Sherrill and the New Jersey Department of Labor and Workforce Development delivered a big victory for New Jersey workers in adopting new regulations clarifying the ABC test for determining worker classification, says the Amalgamated Transit Union (ATU) in applauding the move. The regulations, which take effect October 1, 2026, give workers and employers clear, enforceable standards for distinguishing between employees and independent contractors.
Worker misclassification is one of the most persistent forms of wage theft facing working people today. When employers deliberately label employees as independent contractors, workers lose access to unemployment insurance, workers’ compensation, paid family leave, earned sick days, overtime protections, and the right to organize. These new regulations close the loopholes that bad-faith employers have long exploited to undercut both their workers and the law-abiding businesses that compete against them.
“For too long, companies have gotten away with calling workers independent contractors on paper while treating them like employees without any of the protections that come with that status,” said ATU International President John Costa. “Governor Sherrill and the New Jersey Department of Labor are putting workers first, and we applaud them for it. These regulations give working people the clarity and protections they deserve, and they send a clear message that misclassification will not be tolerated in New Jersey.”
ATU represents over 10,000 transit workers across New Jersey and over 200,000 throughout North America. Our members are on the front lines of worker misclassification in the growing microtransit and paratransit sectors and know firsthand what’s at stake when companies evade their legal responsibilities.
The new regulations build on decades of court decisions and synthesize guidance from the New Jersey Supreme Court, providing both businesses and workers with the clarity needed to apply the ABC test correctly from day one. The ATU is particularly encouraged that the regulations protect legitimate independent contractors while targeting the willful misclassification that has cost the state an estimated $500 million annually in lost payroll tax revenue.
“Workers are not a line item. They’re the backbone of every transit system in this country, and they deserve every protection the law can offer,” Costa said.