The bill amends New Jersey's labor laws to clarify the criteria for classifying individuals as employees or independent contractors, particularly in relation to unemployment compensation and wage payment laws. It introduces new definitions for terms such as "annual payroll," "average annual payroll," "benefits," and "employment," aiming to provide clearer guidelines for both employers and employees regarding their rights and responsibilities. The bill emphasizes the importance of control and independence in determining employment status, categorizing evidence into behavioral control, financial control, and the nature of the relationship between the parties involved.

Additionally, the bill removes previous legal language that specified conditions under which services would be classified as employment, streamlining the criteria for employment classification. It mandates that guidance from the federal Internal Revenue Service (IRS) regarding employment status be considered in these determinations, aligning state law with federal criteria. These changes are designed to enhance the accuracy and fairness of employment classifications, ensuring that individuals receive appropriate benefits and protections under state law while maintaining existing exemptions for certain types of services.