By: Lauren W. Kavanagh, Esq.
Earlier this year, the New Jersey Supreme Court answered a certified question from the Third Circuit Court of Appeals regarding the correct test to be used to determine independent contractor status in New Jersey within the New Jersey Wage Payment Law and New Jersey Wage and Hour Law. The New Jersey Supreme Court held that the “ABC” test, arising out of the New Jersey Unemployment Compensation Act, was the appropriate test to be used.
In light of the New Jersey Supreme Court’s decision, the Third Circuit has now reopened a class action lawsuit filed against Sleepy’s, LLC, brought by its delivery drivers who had been classified by the company as independent contractors. The drivers originally filed the suit alleging they were improperly classified by the company as independent contractors so that the company could avoid paying benefits and overtime, among other things. The district court in the case originally granted summary judgment based upon a different standard, so the Third Circuit has now reopened the case and instructed the district court to apply the “ABC” test in light of the New Jersey Supreme Court’s decision. Employers should continue to monitor this case and reevaluate any of their employees currently classified as independent contractors in light of this decision.
