Law 360 Quotes John L. Shahdanian II on New Jersey’s ABC Test for Worker Classification
A Law360 article examining the ABC test included commentary from John L. Shahdanian II who, as chair of Trenk Isabel Siddiqi & Shahdanian’s Labor and Employment Law practice, provides legal advice to employers about complex matters related to wage and hour and employee classification issues. As the article State ABC Wage Law Tests Face Fights, High Court Reviews explains, the three-prong ABC test for determining if workers are independent contractors, who often lack benefits and protections mandated for employees, dates back nearly 90 years. But its application to wage and hour law is much more recent, and workers and businesses are continuing to grapple with laws codifying such tests, and exemptions to them.
John was asked to comment about the case New Jersey’s top court will soon decide on the issue of whether the ABC test applies to real estate agents. The agents are seeking to undo a January state appellate panel ruling that the test does not apply following an amendment to the state’s Real Estate Brokers and Salesmen Act.
Law360 referred to a 2015 New Jersey Supreme Court decision in Hargrove v. Sleepy’s LLC that ruled that the ABC test, originally used for the state unemployment program, also applied to state wage and hour law.
Regarding the 2015 decision, John said, “It was one of the burgeoning areas of employment law, and it wasn’t exactly clear what was the appropriate method to use. When the Hargrove case came out, that really was where the sea change happened…The world of worker classification just exploded.” Following the decision in the Hargrove case, he added, businesses in the state moved away from using independent contractors due to the possible penalties and lawsuits.
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