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How do I know if I’m really a contractor in New Jersey?

On Behalf of | Mar 21, 2024 | Employment Law |

In the intricate world of New Jersey employment law, discerning whether you are an independent contractor or an employee is pivotal. This distinction bears significant weight on your legal rights and the availability of benefits.

Distinction between contractor and employee

The crux of the matter lies in the degree of control and independence. Independent contractors command their work approach, utilize their own tools and often service multiple clients. Employees, however, are woven into the fabric of the company’s operations and follow the directives of their employers.

Stakes of classification

Your classification dictates your access to critical benefits like unemployment insurance and family leave. Incorrect classification can have dire consequences that affects both the individual’s financial stability and the employer’s legal standing.

Determining your status

New Jersey employs the “ABC Test” to ascertain employment status. To be deemed an independent contractor, one must satisfy all three stringent criteria of this test, which evaluates the level of autonomy (A), the relevance of the work to the company’s core operations (B) and the worker’s established presence in the trade (C).

Entitlements for employees

Employees in New Jersey are privy to a suite of benefits. This includes sick leave accrual, workers’ compensation and unemployment benefits. Awareness of these entitlements is crucial for safeguarding your rights as they are not available for independent contractors. In addition, there are tax consequences to these statuses.

Gravity of accurate classification

Beyond mere administrative categorization, proper classification is integral to equitable tax contributions, legal protections and maintaining a balanced labor market. Misclassification can erode workers’ rights and foster unfair competition.

Identifying your employment status as a contractor or employee in New Jersey transcends mere nomenclature—it is about affirming your rights and securing your benefits. If misclassification concerns arise, legal intervention is recommended to safeguard your interests and ensure compliance with state laws.