While summer vacations unfolded, New Jersey wage and hour law saw two significant developments. On June 1, 2026, New Jersey regulations outlining the “ABC test” for determining employee versus independent contractor status under several major New Jersey statutes took effect. On June 29, 2026, the Appellate Division of the New Jersey Superior Court confirmed that employees may bring representative actions under certain New Jersey wage statutes outside the confines of the federal or state procedural rules governing class actions. Companies with workforces in New Jersey should take note.

State regulations now incorporate the ABC test 

The New Jersey Administrative Code now expressly identifies the statutes and Department of Labor and Workforce Development for which “the issue of independent contractor status is based on application of the ABC test.” N.J.A.C. § 12:11-1.1. These include the Wage Payment Law, Wage and Hour Law, Earned Sick Leave Law, and Call Center Jobs Act.

For some of these statutes, application of the ABC test had been addressed through case law before the new regulations. The regulations incorporate certain conclusions that courts have developed through case law—for example, that putative employers do not exercise control over workers for purposes of prong A of the test merely by taking steps to ensure compliance with federal, state, and local laws and regulations. N.J.A.C. § 12:11-1.3(f).

Other concepts were considered but ultimately omitted from the final regulations. For example, prong B asks whether a worker’s services are performed outside of the putative employer’s usual course of business or outside of all the putative employer’s places of business. The proposed regulations published in May 2025 included examples of services “typically” within or outside various types of companies’ businesses (e.g., “A dentist engages the services of a cleaning person to clean the dental office. The services performed by the cleaning person are likely outside of the dentist’s usual course of business.”). The final version, effective June 1, 2026, notably contains no such examples. N.J.A.C. § 12:11-1.4.

Although the regulations were published and took effect on June 1, 2026, they do not become “operative” until October 1, 2026. Companies interested in independent contractor classification in New Jersey should review the regulations closely and ensure that consultant, independent contractor, and similar agreements—as well as company policies and practices—conform.

The new regulations continue a trend toward expanded use of the ABC test, including in states such as California, Illinois, Massachusetts, and New Hampshire. Companies with workforces in the Northeast and Mid-Atlantic, however, should be aware that neighboring states take varying approaches to worker classification, including depending on the particular statute at issue. For example, Pennsylvania applies a multi-factor economic realities test under the Pennsylvania Minimum Wage Act and a right-to-control analysis under the Pennsylvania Wage Payment and Collection Law. 

The different permutations of the test for independent contractor status can lead to head-scratching results, such as a court finding a worker an independent contractor for purposes of federal wage law but an employee for purposes of New Jersey wage law. See our recent blog on New Jersey worker classifications.

New Jersey courts recognize representative actions

Meanwhile, the Appellate Division of the New Jersey Superior Court (the state’s intermediate appellate court) issued a decision on June 29, 2026, confirming that employees may bring representative actions under certain New Jersey wage statutes without formal class certification, under a “similarly situated” standard that state courts have yet to define.

In Martinez v. T. Slack Environmental Services, Inc., No. A-1008-24 (N.J. Super. Ct. App. Div. June 29, 2026), a former hourly laborer employed by a small non-union contractor alleged violations of the New Jersey Wage and Hour Law, Earned Sick Leave Law, and Prevailing Wage Act. The plaintiff claimed that he was paid at a lower “D” laborer rate despite performing higher-classification “B” and “C” laborer functions on public works projects. He further alleged that the company (a) failed to pay a properly blended overtime rate during weeks he performed both public and private work; (b) failed to compensate him for off-the-clock activities such as driving equipment and loading trucks; and (c) improperly calculated earned sick leave wages.

The plaintiff sought to represent similarly situated current and former hourly employees. The trial court certified the matter as a representative action with a six-year look-back period, and the employer appealed. The Appellate Division held that the Wage and Hour Law and the Prevailing Wage Act authorize representative actions without requiring formal class certification.

The court emphasized that neither the Wage and Hour Law nor the Prevailing Wage Act contains opt-in language comparable to that of the federal Fair Labor Standards Act (FLSA), rejecting the employer’s argument that the plaintiff was required to present evidence of similarly situated employees before the matter could proceed as a representative action.

The court also addressed the applicable statutes of limitations. Applying Maia v. IEW Construction Group, it held that the 2019 amendment extending the New Jersey Wage and Hour Law’s limitations period to six years applies only prospectively—covering conduct on or after August 6, 2019—while the two-year period governs earlier conduct. In contrast, the court upheld a six-year look-back for Prevailing Wage Act claims, reasoning that prevailing wage violations are analogous to breach of contract.

Looking ahead

The Martinez decision and the new ABC test regulations represent notable shifts in New Jersey’s wage and hour landscape. Companies with operations in New Jersey, particularly those working with independent contractors and those in the construction and public works sectors, should consider these developments as part of their ongoing compliance efforts.

Companies should proactively review their payroll practices, worker classification determinations, and timekeeping policies in light of these changes. Consulting with experienced employment counsel can help companies assess compliance with these requirements and evaluate litigation risk in this evolving area.