Misclassification happens when an employer calls a worker an independent contractor instead of an employee, potentially denying that worker overtime, unemployment benefits, workers’ compensation, and the right to unionize.
What is the ABC test?
New Jersey uses the ABC test to determine whether a worker is an independent contractor or an employee. A worker is considered an employee unless the employer proves all three parts of the test.
- The worker is free from control or direction over the performance of the service.
- The service is performed outside the usual course of the business.
- The worker is customarily engaged in an independently established trade, occupation, profession, or business.
Why classification matters
- Employees receive minimum-wage and overtime protections.
- Misclassified workers may lose unemployment and temporary disability coverage.
- Independent contractors generally cannot access workers’ compensation benefits or collective-bargaining rights in the same way employees can.
What workers can do
- Document who controls your hours, tools, equipment, and work conditions.
- Keep records concerning wages and benefits.
- Speak with a union representative or legal counsel if classification has affected your rights.