The Chamber of Commerce Southern New Jersey (CCSNJ) is the region’s largest and most influential business organization representing businesses in the seven most southern counties of New Jersey, as well as greater Philadelphia and northern Delaware.  The CCSNJ has over 1,200 member companies, approximately 85 percent of which are small businesses that employ less than 50 people.

Thank you for the opportunity to submit comments regarding the proposed rule changes to N.J.A.C. 12:11 concerning worker classification under the ABC test. While we appreciate the Department’s goal of clarifying worker classification, we respectfully submit that these proposed changes may have significant unintended consequences for New Jersey’s workforce and economy.

As written, we are concerned that the proposed changes may create substantial challenges for legitimate independent contractors and the businesses that rely on them. Many professionals, particularly those in consulting, logistics, creative industries, and the gig economy, value the flexibility and autonomy that independent contracting offers. It’s important that any regulatory changes preserve space for this kind of work while continuing to prevent misclassification.

Specifically, we are concerned about the proposal’s approach to Prong A, which suggests that requiring a contractor to comply with laws or safety standards could be viewed as exercising control. This interpretation may have a chilling effect on safety and legal compliance, placing businesses in a difficult position. We believe there’s an opportunity here to clarify that adherence to generally applicable laws should not, in and of itself, indicate an employer-employee relationship.

Regarding Prong C, we understand the Department’s desire to ensure that contractors are operating true independent businesses. However, the proposed standard appears to require contractors to maintain ongoing, client-facing operations with branding, advertising, and multiple clients to qualify. In practice, this may disqualify many legitimate independent contractors who work on a project basis or within narrow specialties. We urge the Department to consider a more inclusive interpretation that recognizes the diverse ways independent professionals organize their work.

We also would like to raise concerns with the proposed subfactor that suggests the use of digital applications or software while performing services constitutes evidence of control. This interpretation is overly broad and risks misclassifying countless independent workers who use digital platforms to connect with customers. In practice, digital tools vary widely in how they support people who advertise or sell goods or offer services like transportation, delivery, personal services, childcare, and home-based tasks. For example, some platforms operate solely as online directories, where service providers and clients independently arrange bookings without any involvement from the marketplace. To presume that use of such tools alone establishes control would be inappropriate. We strongly recommend that this subfactor be removed or, at a minimum, revised to reflect that each situation must be evaluated based on the full context of the relationship. As drafted, the provision could have the unintended effect of cutting off many flexible, part-time income opportunities, particularly for those using digital tools to supplement their income. In turn, families and small businesses across New Jersey who rely on these services would likely face reduced availability and increased labor costs.

Additionally, while the proposal states there would be no negative effect on employment or economic activity, available data from states with similar policies suggests otherwise. For instance, after California’s implementation of AB5, studies documented a decline in self-employment and overall job numbers. We encourage the Department to fully consider this data and assess whether a more balanced approach might avoid these outcomes.

We also believe that the rulemaking process would benefit from expanded public engagement. Given the scope and complexity of the proposal, holding additional hearings throughout the state and extending the comment period would give businesses and workers more opportunity to weigh in and help shape a policy that works for everyone. Input from stakeholders in all regions, including South Jersey, is critical to crafting a regulation that reflects the full diversity of our workforce.

Lastly, given that there are evolving discussions at the federal level around worker classification standards, it may be prudent to align this proposal more closely with potential federal guidance to ensure long-term consistency and avoid conflicts down the road.

In closing, we share the Department’s interest in ensuring workers are properly classified. However, we respectfully request that the Department revisit certain elements of this proposal and work with stakeholders across the state to develop a regulatory framework that balances worker protection with economic opportunity and workforce flexibility.

Thank you again for your consideration.