Court Rules Streamers Are Independent Contractors

A federal court in New Jersey ruled on May 29, 2026, that adult entertainers streaming on the “Streamate” platform are classified as independent contractors under federal law but fail to meet New Jersey’s “ABC test.” The decision in Tomasello v. ICF Technology Inc. shows a difference between federal and state labor rules.

The case involved performers who said they were misclassified by the platform operator, which kept 65% of their tips and paid them below minimum wage. The platform claimed the performers’ work didn’t fit traditional employment categories. The court agreed with the federal view but not the state claim.

Under the Fair Labor Standards Act (FLSA), the performers met the “economic reality test,” which looks at factors like control, profit chances, and investment. New Jersey’s ABC test requires workers to be free from control, do work outside the employer’s usual business, and run an independent trade.

Judge Madeline Cox Arleo wrote that the performers “remain statutory employees under New Jersey’s strict ABC framework.” The court said the platform’s business depends on content made by performers, even if they stream from their own locations.

The ABC test’s second part—whether work is done outside the employer’s usual business—was key. The court said the platform’s digital system, which connects customers and handles transactions, counts as a “place of business” under state law. Logging into Streamate, the court noted, puts performers in the company’s virtual space.

The platform argued that since performers use their own gear and set their own hours, they’re independent. But the court pointed to the performers’ ability to stream on competitor platforms as not meeting the ABC test. The ruling shows that New Jersey’s rules need more than flexibility—they need separation from the employer’s core work.

The New Jersey Department of Labor recently finalized ABC test rules, but the court said those don’t affect this case. The decision shows that state law may see workers as employees even if federal rules say they’re independent.

Employers in New Jersey now face a possible legal challenge. Workers who use online platforms to create content—often seen as independent under federal law—might be seen as employees under state law. This could raise legal risks for gig economy companies and similar platforms.

The ruling adds complexity for businesses in different states. While the FLSA’s economic reality test allows for detailed checks, New Jersey’s ABC test requires all three parts to be met. Employers may need to rethink how they classify workers to avoid legal issues under state law.