A New Jersey independent contractor agreement is a document that outlines the relationship between a contractor providing services to a client. A client usually implements this agreement on a per-project basis, so the contractor doesn’t have employee status.
According to New Jersey law, every worker is an employee unless they are an independent contractor. Simply being issued a 1099 form for tax purposes does not make someone an independent contractor. Independent contractors are defined by the ABC test alone in the state of New Jersey. [1]
New Jersey uses the ABC test to define workers between employees and independent contractors. [2] Under the ABC test, a worker is always classified as an employee rather than an independent contractor unless the following three criteria are all met:
Without meeting all three standards, a worker must be classified as an employee.
New Jersey doesn’t have any unique rights for independent contractors. As with most states, independent contractors have the right to:
Some other rights and responsibilities for New Jersey contractors to consider include:
New Jersey utilizes a common law standard that gives clients the right to perform a control test when evaluating worker classification for tax purposes. In order to file taxes as an independent contractor, an individual needs to meet the requirements of the ABC test and be classified as such, as per New Jersey law.
A client doesn’t withhold income taxes from a contractor. Rather, a contractor needs to report and file their income taxes independently.
Independent contractors are paid on a commission basis and set the parameters for their own work. As a result, independent contractors are considered self-employed and are unable to collect unemployment. Employees who have been misclassified as independent contractors may challenge the misclassification in order to receive unemployment.
Contractors aren’t included under the New Jersey Unemployment Compensation Law. They can’t seek workers’ compensation for work-related injuries because they don’t have the same protections as employees.
View a sample of our New Jersey independent contractor agreement. Download it as a PDF or Word file below: