Compliance Stuff

  At a Glance New Jersey DOL issued final rule implementing the "ABC" test for assessing whether workers are employees or independent contractors under state law. The final rule scaled back or deleted some of the provisions to which the business community objected, but left much of the proposed ABC test intact. After more than a year’s delay, the New Jersey Department of Labor announced a final rule implementing the state’s “ABC” test. T he ABC test is used to determine a worker's status as either an employee or as an independent contractor under multiple laws, including New Jersey’s wage-and-hour laws . After the Department first proposed the rule last year, it received hundreds of comments expressing concern about the rule’s breadth. In response, the final rule scales back many of the proposed rule’s most controversial features, including “examples” that would have singled out companies in certain industries. The final rule also takes a softer approach to issues like...

In California, employers are responsible for payroll taxes and contributions, and filing quarterly and yearly reports with the California Employment Development Department (or the “EDD”) on behalf of its employees . There are four kinds of payroll taxes administered by the EDD: Unemployment Insurance, Employment Training Taxes, State Disability Insurance, and Personal Income Taxes. If there is a legally valid relationship, independent contractors operate as separately established businesses and payments to them are treated the same as payments to other companies. To qualify as an independent contractor, the contractor’s business and the parties’ services arrangement must either satisfy all three components of the ABC Test or fall within one of the exceptions to the ABC Test and meet the requirements of California’s common law test, the Borello standard. If the ABC Test or one of its exceptions are not satisfied, the contractor will be deemed an employee, and the contracting company wi...