New Jersey's $2.77 Million Truck Driver Misclassification Settlement: What It Means for Gig Drivers

On July 29, 2026, New Jersey announced a settlement worth at least $2,775,000 with STG Logistics and its related companies over allegations that they misclassified hundreds of truck drivers as independent contractors. Of that money, $2,220,000 goes to the drivers themselves. The remaining $555,000 goes to the State.

You own the vehicle. You get a 1099. The company calls you an independent contractor and tells you that you are your own boss. Sound familiar? It actually is quite similar. Different vehicle, different freight, same label, and, most importantly, the exact same legal test.

Here is what actually happened, and what it may mean for gig drivers and other misclassified workers in New Jersey.

What New Jersey actually settled

The core allegation was simple: the companies treated employee truck drivers as independent contractors. According to the State, that label deprived those drivers of minimum wage, overtime, workers' compensation, unemployment insurance, temporary disability benefits, earned sick leave, job-protected family leave, and equal pay protections.

The receipts, from the State's own announcement:

• $2,775,000 total settlement value
• $2,220,000 paid to the misclassified truck drivers
• $555,000 paid to New Jersey in penalties and fund contributions
• $7,500,000 in additional penalties owed to the State if the companies fail to comply with the agreement
• Hundreds of drivers covered
• Ongoing obligations to follow New Jersey labor law and report compliance information to the Department of Labor

The timeline is worth sitting with. The Department of Labor opened its investigation in 2019, looking at a predecessor company's facility on Wilson Avenue in Newark. The State filed suit in December 2023. The settlement landed in July 2026. Along the way the business was sold and the buyer went into bankruptcy.

The Department's own summary of the case is in its July 29, 2026 announcement.

Why this was New Jersey's first case of its kind

This was not a private class action. This was the State of New Jersey walking into Superior Court as the plaintiff.

In 2021, New Jersey passed a package of misclassification laws that, among other things, let the Commissioner of Labor bring an enforcement action directly in Superior Court against an employer that misclassifies workers, instead of routing everything through an administrative hearing. The same package broadened the State's stop-work order power to reach all of an employer's worksites rather than just the one where violations were found, and allowed recovery of fines, penalties, attorneys' fees, and investigation costs.

The STG case was the first lawsuit filed under that authority. Acting Labor Commissioner Kevin Jarvis put it plainly: "This was our first-ever Superior Court misclassification case, and we saw it through to the end," noting that it survived a company sale, a bankruptcy, and years of litigation. Attorney General Jennifer Davenport framed the stakes this way: "Corporate wrongdoers cannot pad their profits by cutting corners and exploiting the workers who keep their businesses running."

For drivers, the takeaway is not the dollar figure. It is that the enforcement tool built in 2021 has now been carried across the finish line once. It is no longer theoretical.

The same test decided it: New Jersey's ABC test

Here is the part that matters most for gig drivers.

New Jersey did not resolve this case by asking whether the drivers felt like contractors, or whether they had signed something calling themselves owner-operators. New Jersey applied the ABC test, the same test that governs whether a rideshare or delivery driver in this state is an employee.

Under the ABC test, a worker who performs services for pay is presumed to be an employee. The company carries the burden of proving all three prongs:

• A. The worker is free from the company's control or direction.
• B. The work is outside the company's usual course of business, or performed outside all of the company's places of business.
• C. The worker is customarily engaged in an independently established business.

Fail one prong, and the worker is an employee. According to the State's description of the case, the company failed all three.

Now run the same analysis on app-based driving. A drayage company's business is moving freight, and the drivers moved the freight. A rideshare company's business is selling rides, and the drivers give the rides. A delivery app's business is delivering food and goods, and the drivers do the delivering. In our opinion, Prong B is where these cases tend to break, and it breaks the same way whether the container is a shipping container or a burrito.

We wrote a long piece on how New Jersey's newly adopted 2026 regulations sharpen that analysis for app drivers: New Jersey's 2026 ABC test and why rideshare drivers are likely employees. The trucking settlement is the same framework, applied by the same agency, with real money at the end of it.

Owning the truck did not make them contractors

Port and drayage drivers are the original version of this argument. The industry standard for decades has been to tell a driver they are a small business owner because their name is on the truck, and then to control their day completely: which loads, which times, which terminal, which rules, which rate.

Gig drivers get the same speech in different words. You own the car. You choose your hours. You are your own boss.

New Jersey's ABC test does not ask who holds the title to the vehicle. It asks who controls the work, whose business the work belongs to, and whether the worker actually runs an independent enterprise that could survive without that one company. Owning a depreciating asset that you use to perform a company's core service is not a business. In our opinion, it is often just the company's biggest expense moved onto the worker's credit line.

That is the whole point of our post on what New Jersey drivers may be owed if they are employees: if you are an employee, the vehicle costs were probably never yours to carry.

This was not a one-off: a $7 million delivery driver settlement four months earlier

If the trucking settlement were the only case, you could call it an outlier. It is not.

In March 2026, New Jersey announced a $7,000,000 settlement with PDX North, Inc., a last-mile delivery company, over the misclassification of more than 1,000 delivery drivers. The structure: $5,000,000 paid up front, plus $2,000,000 in suspended penalties that come due if the company violates the agreement before January 1, 2029. The State's audits had assessed roughly $7.86 million in unpaid contributions, interest, and penalties.

That money resolved the State's assessments rather than landing directly in drivers' pockets, and the distinction is worth understanding. The drivers' win in that case was forward-looking: the company agreed to reclassify its delivery drivers as employees and to come into compliance with New Jersey wage, benefit, and tax laws by January 1, 2027, which puts minimum wage and overtime protection, earned sick leave, unemployment, family leave, temporary disability, and workers' compensation coverage back on the table for them.

Read that again. A delivery company with over a thousand drivers agreed to make them employees. The details are in the Attorney General's announcement of the PDX North settlement and the Department of Labor's March 12, 2026 release.

Two settlements in five months, one in trucking and one in last-mile delivery, both about drivers, both resolved with money and forward-looking obligations. In our opinion, that is a pattern, and delivery driving is a very short step from the work gig drivers do every day.

The trucking industry had a federal shield that the apps do not, and it still lost

One more piece of legal history is worth knowing, because it cuts against the companies.

Motor carriers have long argued that a federal law, the Federal Aviation Administration Authorization Act, preempts state classification tests as applied to trucking. In 2019, the Third Circuit rejected that argument in Bedoya v. American Eagle Express, Inc., holding that the federal statute does not preempt New Jersey's ABC test for delivery drivers bringing state wage claims.

So the trucking and delivery industry brought a federal preemption defense that most app companies cannot even raise, and New Jersey's ABC test survived it. In our opinion, that makes the classification argument harder for the apps, not easier.

What this settlement means for gig workers and other misclassified employees

Five things, in our opinion.

1. The label in the agreement did not save the company. Every driver in these cases had paperwork calling them an independent contractor. It did not decide the outcome, because under New Jersey law it cannot. If you signed a Terms of Service that calls you a contractor, that document is evidence of what the company wanted. It is not the answer to the legal question.

2. State enforcement now has a completed track record. New Jersey has an Office of Strategic Enforcement and Compliance, Superior Court authority since 2021, expanded stop-work power, and two large driver settlements in 2026. Misclassification enforcement in this state is active, funded, and finishing cases.

3. Bankruptcy and a corporate sale did not end it. The predecessor sold the business. The buyer assumed liability for the seller's past employment practices. The buyer later filed for bankruptcy, and the drivers' recovery was still structured to come ahead of other creditors. Drivers often assume a company reorganizing or getting bought means the claim evaporates. Here it did not.

4. A state case is not your case. This is the caveat that matters most. The State picks its targets, and its settlement covers the drivers at that company only. It does not put money in the pocket of a driver at a different company, and the State is not obligated to bring your case. New Jersey's wage laws give individual workers something the State's penalty recovery does not automatically deliver: a lookback as long as six years, and, under the Wage Theft Act, damages that can reach up to three times what is owed. Those are claims a worker has to bring. Our guide to New Jersey rideshare wage theft walks through what that can include.

5. The sooner a claim is filed, the sooner it resolves. Look at the trucking timeline again. The State opened its investigation in 2019. It filed suit at the end of 2023. Drivers got paid in 2026. Nothing in that sequence moved until a case was actually filed. A driver's own claim works the same way: the recovery and the resolution both start from filing. Waiting does not improve a claim. It just pushes the finish line further out.

The same reasoning applies well beyond driving. New Jersey's misclassification enforcement has reached construction, warehousing, delivery, janitorial, and home care work. If you have been paid on a 1099 in New Jersey while being treated like an employee, the ABC test is the test that applies to you too.

What a New Jersey gig driver should do now: file the claim

Not research it. Not think about it next season. File it.

The drivers in the trucking case did not get $2.22 million because they were careful or because they waited for the right moment. They got it because a claim was filed and then pushed all the way to the end. That is the only mechanism that produces a check. A misclassification claim that exists on paper starts moving toward a resolution. A claim you are still considering does not move at all.

And you do not need to build the case yourself before you start. That is our job. Drivers routinely come to us with nothing but the app on their phone and a rough sense of how long they drove, and that is a perfectly normal place to begin. We have handled these claims for New Jersey drivers many times over, and we know where the proof lives and how to go get it.

So the honest answer to "what should I do now" is short. Find out whether you have a claim, and if you do, get it filed. Every month it sits is a month of resolution you gave away.

Frequently asked questions

What was the New Jersey truck driver misclassification settlement?

On July 29, 2026, New Jersey announced a settlement worth at least $2,775,000 with STG Logistics and related entities, resolving allegations that hundreds of truck drivers were misclassified as independent contractors. $2,220,000 goes to the drivers and $555,000 goes to the State, with an additional $7,500,000 in penalties owed if the companies fail to comply with the agreement.

Why was this settlement significant?

It was New Jersey's first misclassification lawsuit filed in Superior Court under the enforcement authority the State enacted in 2021, and the State carried it through a company sale and a bankruptcy to a completed settlement.

Does the trucking settlement apply to gig or rideshare drivers?

Not directly. It resolves claims for the drivers at those specific companies. What carries over is the legal framework: New Jersey applied its ABC test, the same test that decides whether a New Jersey rideshare or delivery driver is an employee, and the State's position was that the company failed all three prongs.

Does signing an independent contractor agreement mean I am a contractor in New Jersey?

No. Under New Jersey law, a worker who performs services for pay is presumed to be an employee, and the company must prove all three prongs of the ABC test. A contract label, a 1099, or a business registration does not settle the question by itself.

If the state already sued a company, do I still need my own claim?

Generally yes, if you want the remedies available to individual workers. A state enforcement action recovers penalties and fund contributions for New Jersey and back wages for the covered workers at that employer. New Jersey's wage laws separately allow individual workers to look back as far as six years and, under the Wage Theft Act, to seek damages that can reach up to three times the amount owed.

When should a New Jersey driver file a misclassification claim?

As soon as they can. A claim does not begin working until it is filed, and neither the recovery nor the resolution starts before that. New Jersey's wage laws also allow a lookback as long as six years, which is a window that moves forward with time. In our opinion, there is no advantage to waiting and there are two reasons not to.

Do I need records or paperwork before I can start a claim?

No. Drivers regularly start with nothing more than the app on their phone and a general sense of how long they drove. Gathering and proving the details is the work of the case, and it is our job, not a prerequisite the driver has to satisfy first.

Does a company's bankruptcy wipe out a misclassification claim?

Not necessarily. In this case the business was sold, the buyer assumed liability for the seller's past employment practices, and the buyer's later bankruptcy did not stop the drivers' recovery, which was structured to be paid ahead of other creditors. Every bankruptcy is different, but the assumption that a filing ends the claim is often wrong.

I drove in New Jersey but the company is based somewhere else. Does that matter?

It can matter, but not the way companies suggest. New Jersey's wage and classification laws are generally concerned with work performed in New Jersey. Our intake is New Jersey only, and the question we start with is where you drove.

The bottom line

New Jersey just put $2.22 million in the hands of truck drivers who were told for years that they were their own bosses, and four months earlier it got a delivery company with more than a thousand drivers to agree to treat them as employees. In both cases the company had the paperwork. In both cases the paperwork lost.

In our opinion, the same test, the same agency, and the same reasoning point at the rideshare and delivery apps that run on New Jersey drivers who supply the car, the gas, the insurance, and the risk. The difference is that nobody is going to file that claim for you.

Our firm represents drivers throughout New Jersey on a full contingency, which means we recover nothing unless you do. If you have driven in New Jersey and the contractor label never matched how you were actually treated, take our short survey and find out where you stand. You can also read more at gigdriver.lawyer.