When “Independent Contractor” Doesn’t Stick: What a New Federal Case Means for New Jersey Platform Workers

If you make money through a digital platform, whether that be, livestreaming, creating content on You-Tube, or getting paid through an App such as UberEATS—one question can make a big difference in what wage protections you have: Are you an employee or an independent contractor?

A recent decision by the U.S. District Court for the District of New Jersey, Tomasello v. ICF Technology, Inc., et al. (May 29, 2026), drives home just how different that answer can be depending on whether you look at federal law or New Jersey law. In that case, adult livestream performers on the Streamate platform were treated as “independent contractors” under federal law, but as “employees” under New Jersey’s wage statutes. For employers and platform businesses operating in New Jersey or engaging workers who perform services connected to New Jersey, this case has real consequences for what risks companies face.

The plaintiffs in Tomasello were adult entertainers who perform live shows on Streamate, an online platform where customers can watch live video, tip using virtual “Gold,” and purchase private sessions. The performers asserted federal minimum wage claims under the Fair Labor Standards Act (FLSA) and state claims under the New Jersey Wage and Hour Law (NJWHL) and the New Jersey Wage Payment Law ( NJWPL). The core lesson from Tomasello is that worker classification can produce different outcomes depending on whether federal or state law applies.

For the FLSA claim, the U.S. District Court applied the “economic reality” test. This multi‑factor framework looks at:

• the degree of control the company exercises,
• the worker’s personal opportunity for profit or loss,
• the worker’s investment in equipment or materials,
• the skill required,
• the permanence of the relationship, and
• whether the work is integral to the business,

Although the U.S. District Court recognized Streamate’s rules and account oversight, the Court highlighted:

• performers chose when to log on, how long to work, and whether to appear at all,
• performers set some pricing and could influence earnings through their own performance and marketing,
• performers were free to work for other platforms and competitors,
• the relationship was not permanent or exclusive.

After review of those factors, the U.S. District Court concluded that, under federal law, the performers were “independent contractors”, not “employees”. As a result, they were not entitled to FLSA minimum wage protections.

Many platform companies stop the analysis there. But New Jersey law requires more. New Jersey applies a stricter approach to worker classification under its wage statutes. For claims under the NJWHL and NJWPL, courts apply the ABC test, which presumes a worker is an “employee” unless the company can establish each of the following three prongs:

1. The worker is free from control or direction over the performance of the work, both by contract and in fact,
2. The work is outside the usual course of the company’s business, or performed outside all the company’s places of business, and
3. The worker is customarily engaged in an independently established trade, occupation, profession, or business.

Tomasello turned on Prong B. The platform argued that the performers worked remotely and set their own schedules. Even so, the U.S. District Court focused on what the company was actually selling. The court treated Streamate’s “usual course of business” as selling access to adult livestream content, and the performer’s work was that content. Since the workers were providing the core product, the business failed Prong B.

The court also treated the platform’s digital environment as effectively a place of business. Even though performers streamed from home studios or other locations, they were performing “on” Streamate—inside the virtual environment where customers accessed and purchased the service. In that sense, they were not working outside the company’s places of business.

Because Prong B was not met, the ABC test required the court to treat the performers as “employees” under New Jersey wage law. The court granted summary judgment in their favor on the NJWHL and NJWPL claims.

For workers whose income depends on platform work in New Jersey, Tomasello sends a clear signal that the label “independent contractor” is not the final word under New Jersey wage statutes. You can be a “contractor” under federal law and still qualify as an “employee” under New Jersey law. Misclassification risk is about the structure of your business—what you sell, how you deliver it, and how integral workers are to that operation—not just about contract language. If your business relies on 1099 workers to deliver what customers are actually paying for, it’s worth taking a closer look at your classification practices. The more revenue depends on those workers’ actual services, the more likely New Jersey will view those workers as central to your “usual course of business” and therefore be considered “employees” rather than “independent contractors”.

At Stark & Stark, our Employment law team regularly evaluates worker classifications under federal and state laws. If you have questions about worker classifications please contact a member of Stark & Stark’s Employment law team to clarify your rights and obligations.