diff --git a/awx/ui_next/src/components/MultiSelect/MultiSelect.jsx b/awx/ui_next/src/components/MultiSelect/MultiSelect.jsx
index 0448f569e4..9bc8ad2a86 100644
--- a/awx/ui_next/src/components/MultiSelect/MultiSelect.jsx
+++ b/awx/ui_next/src/components/MultiSelect/MultiSelect.jsx
@@ -1,5 +1,7 @@
 import React, { Component, Fragment } from 'react';
 import PropTypes from 'prop-types';
+import { withI18n } from '@lingui/react';
+import { withRouter } from 'react-router-dom';
 import { Chip, ChipGroup } from '@components/Chip';
 import {
   Dropdown as PFDropdown,
@@ -123,7 +125,7 @@ class MultiSelect extends Component {
   removeChip(e, item) {
     const { onRemoveItem } = this.props;
     const { chipItems } = this.state;
-    const chips = chipItems.filter(chip => chip.name !== item.name);
+    const chips = chipItems.filter(chip => chip.id !== item.id);
 
     this.setState({ chipItems: chips });
     onRemoveItem(item);
@@ -199,4 +201,5 @@ class MultiSelect extends Component {
     );
   }
 }
-export default MultiSelect;
+export { MultiSelect as _MultiSelect };
+export default withI18n()(withRouter(MultiSelect));
diff --git a/awx/ui_next/src/components/MultiSelect/MultiSelect.test.jsx b/awx/ui_next/src/components/MultiSelect/MultiSelect.test.jsx
new file mode 100644
index 0000000000..368f5ca27f
--- /dev/null
+++ b/awx/ui_next/src/components/MultiSelect/MultiSelect.test.jsx
@@ -0,0 +1,86 @@
+import React from 'react';
+import MultiSelect, { _MultiSelect } from './MultiSelect';
+import { mountWithContexts } from '../../../testUtils/enzymeHelpers';
+
+describe('<MultiSelect />', () => {
+  const associatedItems = [
+    { name: 'Foo', id: 1, organization: 1 },
+    { name: 'Bar', id: 2, organization: 1 },
+  ];
+  const options = [{ name: 'Angry', id: 3 }, { name: 'Potato', id: 4 }];
+
+  test('Initially render successfully', () => {
+    const renderChips = jest.spyOn(_MultiSelect.prototype, 'renderChips');
+    const wrapper = mountWithContexts(
+      <MultiSelect
+        onAddNewItem={jest.fn()}
+        onRemoveItem={jest.fn()}
+        associatedItems={associatedItems}
+        options={options}
+      />
+    );
+    const component = wrapper.find('MultiSelect');
+
+    expect(renderChips).toBeCalled();
+    expect(component.state().chipItems.length).toBe(2);
+  });
+  test('handleSelection add item to chipItems', async () => {
+    const wrapper = mountWithContexts(
+      <MultiSelect
+        onAddNewItem={jest.fn()}
+        onRemoveItem={jest.fn()}
+        associatedItems={associatedItems}
+        options={options}
+      />
+    );
+    const event = { preventDefault: () => {} };
+    const component = wrapper.find('MultiSelect');
+    component.instance().handleSelection(event, { name: 'Apollo', id: 5 });
+    expect(component.state().chipItems.length).toBe(3);
+  });
+  test('handleAddItem adds a chip only when Tab is pressed', () => {
+    const onAddNewItem = jest.fn();
+    const wrapper = mountWithContexts(
+      <MultiSelect
+        onAddNewItem={onAddNewItem}
+        onRemoveItem={jest.fn()}
+        associatedItems={associatedItems}
+        options={options}
+      />
+    );
+    const event = {
+      preventDefault: () => {},
+      key: 'Tab',
+    };
+    const component = wrapper.find('MultiSelect');
+
+    component.setState({ input: 'newLabel' });
+    component.update();
+    component.instance().handleAddItem(event);
+    expect(component.state().chipItems.length).toBe(3);
+    expect(component.state().input.length).toBe(0);
+    expect(component.state().isExpanded).toBe(false);
+    expect(onAddNewItem).toBeCalled();
+  });
+  test('removeChip removes chip properly', () => {
+    const onRemoveItem = jest.fn();
+
+    const wrapper = mountWithContexts(
+      <MultiSelect
+        onAddNewItem={jest.fn()}
+        onRemoveItem={onRemoveItem}
+        associatedItems={associatedItems}
+        options={options}
+      />
+    );
+    const event = {
+      preventDefault: () => {},
+    };
+    const component = wrapper.find('MultiSelect');
+    component
+      .instance()
+      .removeChip(event, { name: 'Foo', id: 1, organization: 1 });
+    expect(component.state().chipItems.length).toBe(1);
+    expect(onRemoveItem).toBeCalled();
+  });
+});
diff --git a/awx/ui_next/src/screens/Template/shared/JobTemplateForm.jsx b/awx/ui_next/src/screens/Template/shared/JobTemplateForm.jsx
index 98eaa6735e..c1a041d4eb 100644
--- a/awx/ui_next/src/screens/Template/shared/JobTemplateForm.jsx
+++ b/awx/ui_next/src/screens/Template/shared/JobTemplateForm.jsx
@@ -75,19 +75,22 @@ class JobTemplateForm extends Component {
   }
 
   async loadLabels(QueryConfig) {
-    const { loadedLabels } = this.state;
     this.setState({ contentError: null, hasContentLoading: true });
+    let loadedLabels;
     try {
       const { data } = await LabelsAPI.read(QueryConfig);
-      const labels = [...data.results];
-      this.setState({ loadedLabels: loadedLabels.concat(labels) });
+      loadedLabels = [...data.results];
       if (data.next && data.next.includes('page=2')) {
-        this.loadLabels({
+        const {
+          data: { results },
+        } = await LabelsAPI.read({
           page: 2,
           page_size: 200,
           order_by: 'name',
         });
+        loadedLabels = loadedLabels.concat(results);
       }
+      this.setState({ loadedLabels });
     } catch (err) {
       this.setState({ contentError: err });
     } finally {
@@ -116,19 +119,22 @@ class JobTemplateForm extends Component {
       });
     } else {
       this.setState({
-        newLabels: [...newLabels, { associate: true, id: label.id }],
+        newLabels: [
+          ...newLabels,
+          { name: label.name, associate: true, id: label.id },
+        ],
       });
     }
   }
 
   disassociateLabel(label) {
-    const { removedLabels, newLabels } = this.state;
-    const isNewCreatedLabel = newLabels.some(
-      newLabel => newLabel === label.name
+    const { removedLabels, loadedLabels, newLabels } = this.state;
+    const isNewCreatedLabel = loadedLabels.some(
+      loadedLabel => loadedLabel.name !== label.name
     );
     if (isNewCreatedLabel) {
       const filteredLabels = newLabels.filter(
-        newLabel => newLabel !== label.name
+        newLabel => newLabel.name !== label.name
       );
       this.setState({ newLabels: filteredLabels });
     } else {
@@ -277,21 +283,17 @@ class JobTemplateForm extends Component {
                 >
                   <QuestionCircleIcon />
                 </Tooltip>
-                <Field
-                  render={() => (
-                    <MultiSelect
-                      onAddNewItem={this.handleNewLabel}
-                      onRemoveItem={this.disassociateLabel}
-                      associatedItems={template.summary_fields.labels.results}
-                      options={loadedLabels}
-                    />
-                  )}
+                <MultiSelect
+                  onAddNewItem={this.handleNewLabel}
+                  onRemoveItem={this.disassociateLabel}
+                  associatedItems={template.summary_fields.labels.results}
+                  options={loadedLabels}
                 />
               </FormGroup>
             </FormRow>
             <FormActionGroup
               onCancel={handleCancel}
-              onSubmit={values => handleSubmit(values)}
+              onSubmit={formik.handleSubmit}
             />
           </Form>
         )}
diff --git a/awx/ui_next/src/screens/Template/shared/JobTemplateForm.test.jsx b/awx/ui_next/src/screens/Template/shared/JobTemplateForm.test.jsx
index 2350298dbf..b0833f8168 100644
--- a/awx/ui_next/src/screens/Template/shared/JobTemplateForm.test.jsx
+++ b/awx/ui_next/src/screens/Template/shared/JobTemplateForm.test.jsx
@@ -1,7 +1,8 @@
 import React from 'react';
 import { mountWithContexts } from '@testUtils/enzymeHelpers';
 import { sleep } from '@testUtils/testUtils';
-import JobTemplateForm from './JobTemplateForm';
+import JobTemplateForm, { _JobTemplateForm } from './JobTemplateForm';
+import { LabelsAPI } from '@api';
 
 jest.mock('@api');
 
@@ -19,10 +20,16 @@ describe('<JobTemplateForm />', () => {
       inventory: {
         id: 2,
         name: 'foo',
+        organization_id: 1,
       },
       labels: { results: [{ name: 'Sushi', id: 1 }, { name: 'Major', id: 2 }] },
     },
   };
+  beforeEach(() => {
+    LabelsAPI.read.mockReturnValue({
+      data: mockData.summary_fields.labels,
+    });
+  });
 
   afterEach(() => {
     jest.clearAllMocks();
@@ -36,6 +43,7 @@ describe('<JobTemplateForm />', () => {
         handleCancel={jest.fn()}
       />
     );
+    expect(LabelsAPI.read).toHaveBeenCalled();
   });
 
   test('should update form values on input changes', async () => {
@@ -104,4 +112,59 @@ describe('<JobTemplateForm />', () => {
     wrapper.find('button[aria-label="Cancel"]').prop('onClick')();
     expect(handleCancel).toBeCalled();
   });
+
+  test('handleNewLabel should arrange new labels properly', async () => {
+    const handleNewLabel = jest.spyOn(
+      _JobTemplateForm.prototype,
+      'handleNewLabel'
+    );
+    const event = { key: 'Tab' };
+    const wrapper = mountWithContexts(
+      <JobTemplateForm
+        template={mockData}
+        handleSubmit={jest.fn()}
+        handleCancel={jest.fn()}
+      />
+    );
+    const multiSelect = wrapper.find('MultiSelect');
+    const component = wrapper.find('JobTemplateForm');
+
+    wrapper.setState({ newLabels: [], loadedLabels: [], removedLabels: [] });
+    multiSelect.setState({ input: 'Foo' });
+
+    wrapper.find('input[aria-label="labels"]').prop('onKeyDown')(event);
+    expect(handleNewLabel).toHaveBeenCalledWith('Foo');
+
+    component.instance().handleNewLabel({ name: 'Bar', id: 2 });
+    expect(component.state().newLabels).toEqual([
+      { name: 'Foo', organization: 1 },
+      { associate: true, id: 2, name: 'Bar' },
+    ]);
+  });
+  test('disassociateLabel should arrange new labels properly', async () => {
+    const wrapper = mountWithContexts(
+      <JobTemplateForm
+        template={mockData}
+        handleSubmit={jest.fn()}
+        handleCancel={jest.fn()}
+      />
+    );
+    const multiSelect = wrapper.find('MultiSelect');
+    const component = wrapper.find('JobTemplateForm');
+
+    component.setState({
+      newLabels: [{ name: 'Foo', id: 1 }],
+      loadedLabels: [{ name: 'Bar', id: 3 }],
+      removedLabels: [],
+    });
+    component.update();
+    multiSelect.setState({ input: 'Wowza' });
+    component.instance().disassociateLabel({ name: 'Foo', id: 1 });
+    expect(component.state().newLabels.length).toBe(0);
+    expect(component.state().removedLabels.length).toBe(0);
+
+    component.instance().disassociateLabel({ name: 'Bar', id: 3 });
+    expect(component.state().newLabels.length).toBe(0);
+    expect(component.state().removedLabels.length).toBe(1);
+  });
 });