IRI Urges New Jersey to Keep Advisers, Broker/Dealers ‘Independent’

The Insured Retirement Institute has publicly opposed the New Jersey Department of Labor and Workforce Development’s proposed redefinition of “independent contractors,” stating that the guidelines would exclude independent financial advisers and broker/dealers.

Sarah Wood, the IRI’s director of state policy and regulatory affairs, shared the text of a letter sent to the NJ DOL, in which she wrote that the new rules would “upend the business model” for New Jersey’s retirement income industry and annuity marketplace.

The NJ DOL proposed in April an “ABC test” of three criteria to determine whether a worker is a true independent contractor or an employee entitled to company benefits. Those seeking “independent contractor” status would need to prove they:

• perform services not controlled by their customers;
• do their work outside of their customers’ course of business and places of business; and
• have their own independent trade or business.

Wood argued that independent financial professionals could not meet those criteria, as they do not set their own pay, and their required compliance with policies set by others could be seen as “employer-type control.” She also wrote that consumers could lose access to products, since some firms primarily use independent agents to distribute their life and annuity products.

Wood also noted that when California adopted similar rules for classifying independent contractors in 2019, it included an exception for broker/dealers and investment advisers. She recommended New Jersey make a similar exception if it moved forward with the proposal.

According to the NJ DOL, its proposed rules would safeguard the rights of employees who were incorrectly classified as independent contractors. In 2022, Uber Technologies Inc. paid the department $100 million after mislabeling its drivers as independent contractors and not contributing to employee benefits.

The U.S. Department of Labor under former President Joe Biden adopted similar guidelines to distinguish independent contractors from employees in 2024, but in May 2025, President Donald Trump’s DOL announced it would no longer enforce that rule.

IRI, citing research by NERA Economic Consulting, said one-quarter of New Jersey’s financial and insurance service workers—about 6,300 people—work for independent-contractor-led firms.