Performers in New Jersey Win Classification Fight Despite FLSA Loss

On May 29, 2026, a U.S. District Court in New Jersey made a noteworthy decision regarding the classification of performers on an adult streaming platform. The court determined that these performers were considered independent contractors under the federal Fair Labor Standards Act (FLSA). However, they did not meet the criteria to be classified as independent contractors under New Jersey’s more stringent “ABC test.”

The court explained that according to New Jersey’s ABC test, an enterprise’s place of business includes any location where core commercial services are being carried out, which includes online digital platforms. This ruling sheds light on the challenges employers may face in classifying workers as independent contractors in New Jersey compared to under the FLSA. It has significant implications for gig economy companies.

In the case of Tomasello v. ICF Technology Inc., a group of adult entertainers who livestream on the “Streamate” digital platform filed claims under the FLSA, the New Jersey Wage and Hour Law, and the New Jersey Wage Payment Law. They alleged that the platform misclassified them as independent contractors, kept a large portion of their online tips, and paid them less than minimum wage.

The court ultimately found that although the performers met the criteria for independent contractors under the FLSA’s economic reality test, they did not pass New Jersey’s ABC test. The judge noted that even though the performers displayed characteristics of independent contractors under federal law, they were still considered employees under New Jersey’s ABC framework due to not meeting specific criteria.

It is important to mention that this decision was made shortly after the New Jersey Department of Labor and Workforce Development adopted final regulations on the ABC test, set to take effect on October 1, 2026. These regulations did not affect the claims in this case but serve as a guide for future cases.

The court evaluated the FLSA claims based on the economic reality test, considering various factors to determine the nature of the worker-employer relationship. While performers had some autonomy in their work, the court found that they did not meet the requirements of New Jersey’s ABC test due to the nature of their work within the platform’s business operations.

This ruling emphasizes the challenges faced by employers in properly classifying workers in New Jersey under the ABC test and sheds light on the nuances of worker classification in the gig economy industry.