Update: New Jersey Pauses Strenuous Independent Contractor Rule

In a positive sign, New Jersey’s new governor recently halted a burdensome rule restricting freelancing in the Garden State. 

Mikie Sherrill signed an executive order pausing a proposed rule by the previous administration limiting independent contracting in the state, among other regulations. This gives the new administration time to review the proposed rule and consider the loud public outcry against it.

We hope that at the end of the pause, she abandons what would be a devastating blow to freelancers, self-employed, and gig workers in New Jersey, especially women.

What Happened

In January 2026, New Jersey Governor Mikie Sherrill signed Executive Order No. 7, which set a 90-day pause on new and pending administrative rules that were either proposed within the past 12 months or remained pending for the last 18 months (around June 2024) but not yet formally adopted. Among those rules is an NJDOL proposal to tighten the “ABC test” for classifying independent contractors. 

As an outgoing gift to labor unions, the previous governor and his administration sought to copy California’s independent contracting law. The proposed rules would undoubtedly make it more uncertain and difficult for workers to remain independent contractors.

As we explained when the rule was proposed, the state sought to narrow its interpretation of the independent contractor definition in opaque and complex ways that would make it difficult for independent workers. Legal analysts viewed the regulation as an “existential threat” to independent contracting statewide. (You can read more about this here.)

The labor regulators exposed their intention at the time by insinuating that most independent contract work—freelancing, self-employment, and gig work—is not “bona fide.” Their regulatory effort was meant to shuffle those workers into traditional employment for their own good—regardless of whether the independent workers desired that outcome. We know from California’s case that independent contractors do not gain traditional employment; they lose flexible work and drop out of the labor force.

Pausing this regulation gives the governor time to review the near-universal opposition to proposed rules and California’s cautionary tale. 

The Devastating Potential Impacts of the Proposed Rule

During the commenting period for the IC rule, the state was flooded with comments almost entirely in opposition. According to an analysis by freelance writer and champion Kim Kavin, of the roughly 8,300 written public comments filed on the proposed rule, 26 comments (less than 1%) were in support. That means over 99% of the commenters opposed the rule. These were truck drivers, small business owners, working professionals, trade associations, and educational organizations like ours. 

Independent Women submitted an organizational public comment opposing the proposed rules:

The proposal would rework the prongs in ways that will make it more challenging to meet the standards and effectively lead to many workers being reclassified. Vague new factors, subcategories, and examples introduce greater confusion and complexity in determining worker classification. Open-ended statements included in the proposed changes that do not clearly define which factors are appropriate for a given situation or how factors are weighed create significant new uncertainty for businesses and independent workers.

We specifically focused on the direct impact on women, who depend on independent contracting to balance earnings with caretaking for aging parents, raising families, and managing health conditions. The impact would have been devastating.

New Jersey lawmakers were among the opposition to the proposed rule and fought back last year. In August 2025, they introduced a bill to repeal the new rule.

What’s Next
The governor has 90 days from signing the executive order to decide whether to allow the rule to be enacted or otherwise. It was wise to pause the independent contractor rule to consider the strong opposition. We hope she will abandon it. Leave it to the legislature to enact any changes they see fit, but the legislature has already made clear that they are against restricting independent contracting.

As Rosemary Becchi, the president of Jersey 1st, concluded in a recent op-ed for the New Jersey Business Journal:

A pause is not a retreat, it’s common sense. Executive Order No. 7 does more than stall divisive rulemaking. It respects the voices of workers and businesses, honors democratic input, and preserves choices that define modern work. Instead of imposing a rigid, one-way regulatory scheme, New Jersey should engage in a thoughtful, inclusive reconsideration of how best to support both worker protections and economic freedom.

The pause should stand, and the proposed independent-contractor rule should be withdrawn in favor of sensible reforms that strengthen opportunity instead of narrowing it.

We agree.