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NY-NJ port truckers nervous as new labor law goes into effect

Up to 77 % of NY-NJ port drayage drivers are independent contractors. Spencer Platt / Getty Images

By Michael Angell

Truckers and motor carriers at the Port of New York and New Jersey are trying to figure out how to comply with a new law in New Jersey that determines how employers should classify their workers.

While New Jersey state officials say the law is not a major change, the port drayage industry is concerned about higher costs and the potential exit of drivers.

New Jersey’ s Department of Labor( DOL) on Oct. 1 adopted formal rules around the use of the“ ABC” test used by regulators to determine whether workers should be classified as independent contractors or regular employees.

Among the occupations potentially affected by the law is port drayage, where up to 77 % of the drivers are independent contractors, according to estimates from the Association of Bi-State Motor Carriers. Bi-State President Lisa Yakomin told Journal of Commerce on its surface, many New Jersey motor carriers would be in violation of the new law under their existing agreements with owner-operators of trucks serving the port.

“ Drivers are independent for a reason; they want to be that way.”

“ The biggest issue we have is the uncertainty about how to be in legal compliance with the regulation,” Yakomin said.“ No one has answered what does a properly classified, independent owner-operator look like.”

New Jersey Gov. Mikie Sherrill, who turned away requests from state legislators and industry groups to delay the rule until July 2027, told local news stations the day before that the rule lays out criteria the state DOL already used to judge worker classification.

“ If you are an independent contractor today, you will be an independent contractor tomorrow,” she added.

However, Yakomin said the state’ s ABC test does not consider federal trucking regulations. Owner-operators have to display the placard of the motor carrier’ s federal operating authority they work under. But state regulators have considered displaying a motor carrier’ s placard to mark control over a driver under the test’ s“ A” prong.

New Jersey motor carriers have been trying to hire employee drivers to comply with the law, Yakomin said. But she said many drivers want to remain independent due

www. joc. com to schedule flexibility and the higher costs associated with getting their own operating authority and insurance. Anecdotally, some drivers are considering leaving the state due to the law, she added.

“ Drivers are independent for a reason; they want to be that way,” Yakomin said.

Michael Edwards, senior vice president of carrier insurance broker Gallager, said there’ s little scope for a motor carrier using an owner-operator driver to avoid violating the test’ s“ B” prong since it looks at whether a worker is performing a service outside of an employer’ s normal course of business.“ The B prong is impossible to avoid,” Edwards said. To comply with the law, an owner-operator would have to start carrying their own liability insurance instead of being under the motor carrier’ s coverage, Edwards said. Insurance premiums to cover a single owner-operator’ s truck would be much higher than for a larger pool of trucks under a motor carrier, if coverage could be found.

“ That would be a nightmare,” Edwards said.“ Insurance costs would triple.”

California’ s adoption of the ABC test in 2019 resulted in higher back-office and administrative costs for motor carriers, according to Robert Loya, CEO of the Harbor Trucking Association.

Some motor carriers in California set up separate companies for their employee-driver business and a brokerage to hire owner-operators. Each company had to be separately staffed and use different dispatching systems for drivers. A holding company had to be established for the two businesses and even be housed in separate buildings to be fully compliant with the law.

However, Loya said smaller carriers have been able to avoid California regulators and undercut rates on other carriers that have complied with the law.

“ It’ s absolutely a two-tier market,” he said.“ Carriers that want to comply with the law have faced higher costs and more burdens while‘ chameleon carriers’ are out there underbidding.”

email: michael. angell @ spglobal. com

November 2, 2026 | Journal of Commerce 21