In an analysis this week on her freelancebusting.com page, Fight for Freelancers co-founder Kim Kavin discussed with economist Liya Palagashvili how the New Jersey’s ABC test to determine if a worker is an independent contractor is already having harmful effects on employment and, in particular, women’s employment in the state.
In a public comment filed in opposition to a New Jersey Department of Labor rule proposal to greatly reduce the number of independent contractors in the state, Palagashvili, with the Mercatus Center at George Mason University, said the state has seen the following between 1995-2024:
- a 3.81% decrease in W-2 employment
- a 10.08% decrease in self-employment
- a 3.95% decrease in overall employment
Palagashvili also noted that New Jersey’s data also shows gender disparities, writing “women’s traditional W-2 employment declined by 7.40%, while men’s showed no significant change—raising concerns about disproportionate impacts on women following the policy change.
“This pattern suggests the policy may inadvertently create gender-specific barriers in the labor market while failing to deliver its promised worker protections,” Palagashivili added.
NJDOL’s proposed rule mirrors a 2019 California rule called Assembly Bill 5. Research by Palagashvili and her team revealed the following data after AB5 went into effect:
- Self-employment decreased by 10.5% on average for affected occupations.
- Overall employment decreased by 4.4% on average for affected occupations
To see Kavin’s full conversation with Palagashivili, click here.
To see Palagashvili’s full written comments, click here.