[By Ellie Bufkin]
A bill introduced in the New Jersey state legislature could effectively end independent contract work for many residents in the state if passed.
New Jersey Senate President Steve Sweeney introduced bill S4204 in early November, which proposed dramatic changes to the state employment code that would redefine many independent contractors as employees. The measure defines the change as “individuals who perform services for remuneration shall be deemed employees, not independent contractors.”
Exceptions would only be made if individuals could prove that the services rendered were not supervised nor instructed, were outside of the normal scope of business, and that the service was something established as being customarily performed by the individual.
The proposed law would ostensibly protect individuals through other employment statutes, including minimum wage and unemployment tax, something independent contractors are not currently subject to. Critics of the bill, however, note the limitations it would impose on many people who work for themselves throughout the state, including construction contractors, photographers, freelance writers, and drivers for ride-share companies such as Uber and Lyft.
“This bill isn’t about just Uber and Lyft,” said Laurie Ehlbeck, New Jersey State director for the National Federation of Independent Business. “This dangerous legislation ties the hands of every aspiring entrepreneur in the state who owns their own company, including subcontractors with employees who sell their services to another business.
“If a contractor has his or her own employees, their own equipment, they actively marketed their services, and the business hiring them has no control over their work, they could still be considered an employee if it so happens the work they are doing is within the scope of what that hiring business normally does,” she added. “That would leave a lot of people out of work and without income.”
The pending legislation, which could reach a floor vote before the end of the year, echoes a similar bill passed in California that will go into effect in January. That legislation outlines limits for contract work, including freelance writers and cartoonists who would only be allowed to submit 35 separate pieces per outlet in a calendar without having to be an employee.
Many publications depend on a variety of freelance work to continually operate with a constrained budget, while many freelancers depend on the independence to work with many outlets and set their own hours.
Uber chief legal officer Tony West vowed to fight the California legislation.
“Just because the test is hard doesn’t mean that we will not be able to pass it,” he said when the bill passed in September. “In fact, several previous rulings have found that drivers work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces.”
Democratic California Governor Gavin Newsom touted the path to worker unionization when he signed the contentious bill.
“Assembly Bill 5 is landmark legislation for workers and our economy. It will help end worker misclassification — workers being classified as ‘independent contractors’ rather than employees,” he said. “A next step is creating pathways for more workers to form a union, collectively bargain to earn more, and have a stronger voice at work, all while preserving flexibility and innovation.”
