COVID-19 Resource Center

May 24, 2022

New Jersey Workers’ Compensation Legal Update: Proposed Domestic Workers’ Bill of Rights Legislation Includes Possible Changes to WC Employer-Employee Relationship

The Assembly Labor Committee, No. 822, 220th Legislature, is discussing proposed legislation which would establish certain rights for domestic workers.  The proposed legislation would create the “New Jersey Domestic Workers’ Bill of Rights Act.”  This legislation includes a section which imposes an ABC test on the employee/employer relationship for workers’ compensation claims.  The ABC test would result in a broadening of the definition of employee under the statute.

Currently, NJ courts have developed two (2) tests to determine whether an employee/employer relationship exists for workers’ compensation:

  1. Under the “control test,” the relationship between a business and the individual is reviewed. There is employment if the business retains the right to supervise the individual and control what is done as well as how it shall be done; and
  2. Under the “relative nature of the work test,” there is employment if an individual relies on income from the business and the work performed by the individual is an integral part of the activities of the business.

If either of the above tests are met, an employee/employer relationship is established.

The new test being considered under this legislation is the ABC test, which is currently applied in NJ Unemployment Compensation Law.  Under this test, a worker would be considered an employee unless all of the following circumstances apply:

  1. The individual has been and will continue to be free from control or direction over the performance of work performed, both under contract of service and in fact; and
  2. The work is either outside the usual course of the business for which such service is performed, or the work is performed outside of all the places of business of the enterprise for which such service is performed; and
  3. The individual is customarily engaged in an independently established trade, occupation, profession, or business.

If adopted, this new law will make it much easier for petitioners to prove an employment relationship under the ABC test as opposed to the two tests currently being used.  We will continue to monitor this legislation as it would have a broadening effect on which workers would be considered employees for NJ workers’ compensation litigation.

If you have any questions, please contact Dominic LaFauci, Esq. at dlafauci@c-wlaw.com or by phone at (856) 761-3800.