Are you an independent contractor or an employee in New Jersey?  In Hargrove v. Sleepy’s, LLC, the New Jersey Supreme Court held that the “ABC” test derived from the New Jersey Unemployment Compensation Act governs whether a plaintiff is an employee or an independent contractor for purposes of wage and hour claims.

Under the “ABC” test, an individual in New Jersey is an employee as opposed to an independent contractor unless the employer demonstrates that: (1) the individual has been and will continue to be free from control or direction over the performance of such service, both under contract and in fact; (2) such services are either outside the usual course of the business or performed outside of all of the places of business of the enterprise for which such services are performed; and (3) the individual is customarily engaged in an independently established trade, occupation, profession or business.

Given this strict criteria, the Court’s holding should lead to increased findings in New Jersey that individuals are employees as opposed to independent contractors.