New Jersey's ABC Test: Why Many Rideshare Drivers May Be Employees

If you drive for a rideshare or delivery app in New Jersey, you have probably been told you are an "independent contractor." That label is doing a lot of work, and under New Jersey law it does not get the final say.

The starting point: you are presumed an employee

New Jersey uses what courts call the ABC test to decide whether a worker is an employee or an independent contractor. The key thing to understand is the direction of the test: a worker is presumed to be an employee, and it is the company's burden to prove all three of the following to classify you as a contractor.

• A. You are free from the company's control over how you do the work.
• B. Your work is outside the company's usual course of business.
• C. You are engaged in an independently established trade or business.

Why prong B is hard for the apps

Prong B is the one that tends to matter most for drivers. It asks whether your work falls outside what the company normally does. A rideshare company's business is providing rides. A delivery platform's business is delivering. When your job is the very service the company sells, in our opinion it is difficult for the company to show your work is "outside" its usual course of business.

Why classification changes the math

Classification is not just a label. Employees are generally entitled to protections that independent contractors are not, which can include minimum wage and overtime, and they do not shoulder business costs the same way. When a driver absorbs gas, vehicle wear, and both halves of payroll taxes, that is the economic reality misclassification claims are built to examine.

What this means for you

Every situation is different, and this post is general information, not legal advice. But if you have driven in New Jersey and the "contractor" label never quite matched how you actually worked, it may be worth finding out where you stand.