As ABA continues to develop its state advocacy program on behalf of members, there is good news to report out of New Jersey regarding Senate Bill 4204, legislation that would have reclassified thousands of independent contractors in the baking industry and other food and business sectors.
Due to strong engagement by the ABA State Affairs Working Group, ABA members in New Jersey and beyond, S. 4202, which was fast-tracked for passage, ultimately failed to advance during the special session. ABA sent a letter to NJ Senate President Stephen Sweeney expressing the potential negative impact on the baking industry. The letter also included solutions to exempt bakers from the legislation based around an asset provision.
What is the Independent Contractor Legislation?
Many suppliers of baked goods and other products in the food and beverage industry contract with independent distributors for exclusive distribution of the supplier’s products within specified geographical areas throughout New Jersey. For decades, these independent distributors have been the ultimate small business entrepreneurs, earning substantial income through distribution and sale of the supplier’s products in New Jersey. Critically, the value of these transferrable distribution rights depends on the status of independent distributors as independent contractors and not as employees.
The new legislative session in New Jersey is underway and the independent contractor legislation will likely be reintroduced under a different bill number. ABA’s State Affairs Working Group is focusing its efforts to obtain an exemption for bakers in the new bill.
Similar legislation was passed last fall in California, Assembly Bill 5, and is also expected to surface in the New York General Assembly this year.