A decade ago, this blog described the gig economy as a looming force “quietly” reshaping work. Today, that transformation is neither quiet nor in the future tense. Uber, Lyft, DoorDash, Instacart, and Amazon Flex together employ millions of U.S. workers who deliver goods, transport passengers, and provide services every day, with no employer-sponsored workers’ compensation coverage. When those workers are injured on the job, the question of who pays has become one of the most contested issues in American labor law.
In New Jersey, the stakes are especially high. The state has among the most aggressive misclassification enforcement regimes in the nation, a newly decided landmark Supreme Court ruling on undocumented gig workers, and an unsettled regulatory battle over the ABC test that will determine coverage for more than 1.7 million platform workers. The resolution of these battles will directly shape workers’ compensation claims for years to come.
The Classification Battle at the Core of Every Claim
The central workers’ compensation question in the gig economy is deceptively simple: Is the injured platform worker an employee or an independent contractor? The answer determines everything — coverage, benefits, wage replacement, and medical care. For the major platforms, the answer has consistently been “contractor,” which means no workers’ compensation obligation whatsoever.
New Jersey applies the ABC test to resolve this question. Under the test, a worker is presumed to be an employee unless the hiring entity can demonstrate all three of the following:
• Prong A: The worker is free from the control and direction of the hiring entity, both under the contract and in fact,
• Prong B: The service is performed outside the usual course of the hiring entity’s business or outside all of its places of business; and
• Prong C: The worker is customarily engaged in an independently established trade, occupation, profession, or business.
In May 2025, the New Jersey Department of Labor and Workforce Development (NJDOL) proposed regulations to codify and expand this test, tightening each prong and explicitly stating that, by itself, having a 1099, a contractor agreement, or a business registration is insufficient to establish independent contractor status. The proposal was immediately controversial. The NJBIA warned that most gig workers would become employees under the new rules, dramatically increasing platform costs and, in turn, consumer prices.
The Legislature pushed back. In December 2025, the New Jersey Legislature introduced Assembly Concurrent Resolution 177 (ACR177), asserting NJDOL exceeded its authority. Governor Mikie Sherrill, taking office in January 2026, signed an executive order on January 22, 2026, imposing a 90-day pause on the proposed rules. The ABC test battle is unresolved, but for workers’ compensation practitioners, the underlying principle is clear: platform workers who fail Prong B (because driving passengers is core to Uber’s business) and Prong C (because they work for one platform on an app with no independent trade) remain strong candidates for employee classification, and therefore for workers’ compensation coverage.
Lopez v. Marmic: Every Worker Counts
On March 19, 2026, the New Jersey Supreme Court issued a unanimous decision in Sergio Lopez v. Marmic LLC that has immediate implications for the gig economy’s shadow workforce. The court held that undocumented workers are entitled to wages for work actually performed under the New Jersey Wage Payment Law and Wage and Hour Law, regardless of immigration status.
The case arose when a Newark building superintendent, hired by a realty management company, paid a monthly wage and given an apartment, was told his undocumented status meant the employer could no longer pay him. The company substituted rent-free housing for wages. The court rejected that arrangement entirely: barter cannot replace the duty to pay lawful wages, and immigration status is not a defense.
For workers’ compensation, the implications are direct. A significant share of gig and platform workers are undocumented immigrants. The Lopez decision reinforces that if these workers satisfy the employee classification test, their claims for compensation benefits are protected under New Jersey law. An employer cannot substitute non-cash arrangements, claim immigration exposure, or use documentation gaps to escape liability. Acting Labor Commissioner Kevin D. Jarvis stated plainly: “In New Jersey, you must be paid for the work you do — period.” That principle extends to workers’ compensation.
The AI Factor: New Injuries, Old Gaps
The original 2015 post identified technology as the engine of the gig economy. In 2026, artificial intelligence has added a new dimension. Platform algorithms now control dispatch, routing, performance scoring, and even deactivation — decisions that previously required human management. The result is a paradox: workers are more controlled by the platform than ever before, yet still classified as independent contractors.
For workers’ compensation, algorithmic control is directly relevant to Prong A of the ABC test. When an app tells a driver which route to take, grades their performance in real time, and can deactivate them for a low rating, that is control. New Jersey’s NJLAD guidance issued in January 2025 confirmed that AI-driven decisions are subject to the same labor law standards as human decisions. Practitioners pursuing misclassification arguments now have a powerful new tool: algorithmic evidence of employer control.
The AI economy is also creating new categories of workplace injury. Delivery drivers using app-mandated routing face higher collision risks. Warehouse workers subjected to AI-driven productivity monitoring report musculoskeletal injuries at elevated rates. Gig workers denied breaks or rest periods by algorithmic scheduling suffer heat stress and fatigue injuries. These are compensable injuries, if coverage exists. Without employee status, they fall into a gap that no existing safety net fills.
The NJ Enforcement Landscape: High Stakes for Employers
New Jersey’s 2021 misclassification package gave the NJDOL powerful enforcement tools, including stop-work orders and significant financial penalties. Governor Murphy’s Task Force on Misclassification has pursued aggressive enforcement across construction, trucking, and delivery sectors. The message to employers using gig platforms is consistent: if it looks like an employee, New Jersey will treat it like an employee.
The workers’ compensation consequences of misclassification enforcement are direct. When a reclassification finding is made, either by NJDOL audit or court order, the employer faces potential liability for unpaid workers’ compensation premiums, uninsured claims, and penalties under N.J.S.A. 34:15-79. A worker injured during the period of misclassification may bring a claim that the employer and its insurer are now obligated to cover. The stop-work order authority also means entire job sites can be shut down pending compliance.
What Stakeholders Need to Know in 2026
Workers’ compensation attorneys, insurers, and risk managers should approach the gig economy with the following in mind:
• Classification is fact-specific and litigable. A platform contract that says “independent contractor” is the beginning of the analysis, not the end. Courts and the NJDOL look at the actual working relationship.
• Document algorithmic control. For claimants, evidence of app-based dispatch, routing, and performance monitoring supports Prong A's arguments for employee status.
• Immigration status is not a bar to coverage. Post-Lopez, undocumented workers who satisfy the employee classification test are entitled to workers’ compensation benefits under New Jersey law.
• Monitor the ABC test battle. The fate of NJDOL’s proposed regulations and Governor Sherrill’s 90-day pause will determine the classification landscape for 1.7 million New Jersey platform workers.
• Rate exposure is real. NJ workers’ compensation maximum weekly benefits increased to $1,199 effective January 1, 2026. Reclassification of gig workforces creates substantial retroactive premium exposure for platforms.
Conclusion
In 2015, the sharing economy was a disruption on the horizon. In 2026, it is the economy, and its workers are injured every day on the job, leaving them without the coverage the system was designed to provide. The legal architecture is catching up. New Jersey’s ABC test, the Lopez decision, the AI algorithmic control doctrine, and the state’s aggressive misclassification enforcement together represent a tightening net around platform employers who have operated outside the workers’ compensation system.
The question is no longer whether gig workers deserve coverage. Courts, regulators, and legislatures across the country have answered that question. The question now is how quickly the system adapts, and how many workers are injured while they wait.
Related Resources
• Sergio Lopez v. Marmic LLC, A-27-24 (N.J. Supreme Court, March 19, 2026)
• NJ Courts — Full Opinion (PDF): Lopez v. Marmic LLC
• NJ Dept. of Labor — Statement on Lopez v. Marmic LLC (March 23, 2026)
• Gelmans.com — NJ Workers’ Compensation Rates 2026
• NJCRIB — NJ Compensation Rating & Inspection Bureau
• NJ Division on Civil Rights — AI Guidance Under NJLAD (January 2025)
About the Author
Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (West–Thomson Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (West–Thomson Reuters). For over five decades, the Law Offices of Jon Gelman has represented injured workers and their families in matters involving occupational illness and disease.
Blog: workers-compensation.blogspot.com | Substack: jongelman.substack.com
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