Federal Court: Streamate Performers are Employees Under NJ Law, Contractors Federally
A federal court in New Jersey ruled that adult streaming performers are independent contractors under the federal FLSA, but employees under New Jersey's stricter ABC test. The decision highlights the divergent worker classification challenges for gig economy companies operating across states with different labor laws, specifically impacting online digital platforms that aggregate and monetize content creators. This case, _Tomasello v. ICF Technology Inc._, failed to satisfy the "outside of all places of business" clause of New Jersey's ABC test due to the platform acting as a "proprietary workplace."
Key Takeaways
- The U.S. District Court for the District of New Jersey found performers were independent contractors under the federal Fair Labor Standards Act (FLSA).
- The same performers were deemed employees under New Jersey’s "more stringent" ABC test, failing its "outside of all places of business" clause.
- The court determined the Streamate platform functions as a "proprietary workplace," making performers integral to the operator's business.
- New regulations for New Jersey's ABC test go into effect October 1, 2026, though the court noted they do not disrupt its analysis for this case.
Why It Matters
This ruling creates a complex compliance landscape for digital content platforms and gig economy companies operating across states with differing labor laws. It emphasizes the need for platforms to review worker classification, especially in states like New Jersey where the ABC test makes independent contractor status challenging. The decision could compel similar platforms to re-evaluate their operational models and potential liabilities, setting a precedent for how online "places of business" are defined in a digital economy. Expect increased scrutiny on platforms using independent contractors for core revenue-generating services, particularly as more states adopt or strengthen their own worker classification tests.
Additional Context
The New Jersey Department of Labor and Workforce Development (NJDOL) officially adopted new regulations for its ABC test on May 5, 2026, becoming operative October 1, 2026 (per NJDOL, May 2026). These rules provide clarity on the ABC test, which governs worker classification under several New Jersey laws, including wage and hour, wage payment, and unemployment compensation laws. While the NJDOL stated these regulations codify existing court and agency interpretations, many in the business community believe they make it more difficult to classify workers as independent contractors (Ogletree, June 2026). The rules emphasize a "substance-over-form" approach, meaning contracts labeling workers as independent contractors are not solely determinative (Bond, May 2026). Specifically, the regulations clarify that a company's "usual course of business" includes activities regularly engaged in to generate revenue, and "places of business" extend to locations where an integral part of the business is conducted, though a remote worker's home is generally not considered the employer's place of business (Saul Ewing, June 2026). The adoption of these rules is expected to increase enforcement efforts against misclassification violations statewide (Law.com, May 2026).
Read full article at ogletree.com
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