Facebook-f Linkedin-in
(800) 679-2760

News & Events

What’s New

HR MATTERS NEWSLETTER June 2026

New Jersey adopts strict "ABC Test" for Independent Contractors

The New Jersey Department of Labor recently finalized binding regulations (N.J.A.C. 12:11) that codify the state’s strict “ABC Test” across six state labor laws, including wage and hour law and sick leave statutes. Taking effect October 1, 2026, these rules give state auditors a much cleaner, formalized framework to challenge contractor classifications and issue penalties.

Under New Jersey law, a worker is automatically presumed to be an employee. To legally classify someone as an independent contractor, an employer must prove all three prongs of the ABC test. Fail just one, and that worker is legally an employee.

    • Prong A (Control): The worker must be entirely free from your control and direction. The state looks at nine factors here. Notably, if you include non-compete or non-solicitation clauses in a contractor agreement, the state will use that as evidence of employer control.
  • Prong B (Nature of Business): The work must be completely outside the usual course of your business or performed entirely away from your places of business. (Example: a cleaning person at a dental office likely satisfies Prong B; a rideshare driver for a transportation network company does not).
  • Prong C (Independent Business): The worker must be engaged in an independently established profession or business that existed before your relationship and would survive if your contract ended.

The state explicitly confirms that handing a worker a Form 1099 or having them sign a contract that labels them an “independent contractor” means absolutely nothing to an auditor if the three prongs above aren’t met.

Worker misclassification carries massive financial risks, including back wages, tax penalties, and liquidated damages. If you have operations, remote workers, or contractors in New Jersey, now is the time to review those contracts and ensure your documentation can withstand government scrutiny.

New York bans workplace credit checks

An amendment to the New York State Fair Credit Reporting Act went into effect on April 18, 2026, officially banning most employers from requesting or using an applicant’s or employee’s consumer credit history for employment decisions. This includes hiring, compensation, promotions, and other terms and conditions of employment. 

What Is Banned?

Employers can no longer request, require, or use: 

  • Credit reports and credit scores; 
  • Information regarding bankruptcies, collections, or personal debt; and 
  • Payment histories and specific credit account details. 

This applies whether you pull an official report or if a candidate volunteers the information directly. Background screening companies are also barred from providing this data to New York employers unless a legal exception applies. 

The Narrow Exceptions

The state allows a few, strictly interpreted exemptions where financial background is directly relevant to the role. For example: positions that require security clearance, positions that involve financial authority to enter into agreements of more than $10,000, and positions with regular access to trade secrets. These exceptions are expected to be interpreted narrowly, and employers relying on them should ensure clear documentation.

Virginia Joins the Paid Leave Movement: Two Massive Changes for Employers

Governor Abigail Spanberger recently signed two historic pieces of legislation into law: a statewide Paid Family and Medical Leave (PFML) insurance program and a sweeping Paid Sick Leave mandate. 

1. Virginia’s New Paid Family & Medical Leave (PFML) Insurance Program

Virginia is officially the 15th state—and the very first in the South—to establish a state-run PFML program, which will be administered by the Virginia Employment Commission (VEC). 

  • The Benefit: Eligible employees can take up to 12 weeks of job-protected paid leave per year for major life events, including the birth/adoption of a child, their own serious health condition, caring for an ill family member, or seeking safety services due to domestic violence. 
  • The Wage Replacement: Workers will receive up to 80% of their average weekly wage (subject to a state cap) paid directly from the state fund. 
  • How it’s Funded: The program is funded via payroll contributions. Employers with 11 or more employees must pay the employer portion and remit employee deductions (up to 50% can be deducted from wages). Employers with 10 or fewer employees are exempt from the employer premium but must still handle the payroll deductions for their employees. 
  • The Timeline: Payroll deductions are scheduled to begin April 1, 2028, and the state will begin paying out benefits on December 1, 2028. 
2. Virginia’s New Paid Sick Leave Law

Close on the heels of the PFML program, Virginia passed a separate paid sick leave law requiring private employers to provide up to 40 hours of paid sick time per year to full-time and part-time staff. 

  • The Accrual: Employees will earn a minimum of 1 hour of paid sick leave for every 30 hours worked, beginning immediately upon hire. 
  • The Phased Rollout: To give businesses time to adjust, compliance drops in stages based on your headcount: 
    • July 1, 2027: Employers with 50+ employees.
    • January 1, 2028: Employers with 25+ employees.
    • January 1, 2029: All employers with at least 1 employee. 
  • Permitted Uses: Leave covers medical care, diagnosis, or preventative treatment for employees and their families, as well as legal or relocation absences tied to domestic violence, sexual assault, or stalking. 
  • Strict Documentation Limits: Employers are prohibited from demanding specific health details. You can only request a doctor’s note or reasonable documentation if an employee is absent for three or more consecutive workdays. 

As always, clients of Bent Ericksen & Associates will have their policies updated, when applicable, and may be reached for questions or concerns with the new Viginia laws.

Browse

Let us answer your HR compliance questions.

Contact Us
Join Our Newsletter
Subscribe