Update on AB 5 in California
Employers and certain industries have been complaining about AB 5 and why it should not apply to them since its inception. AB 5 was signed into law in September 2019 expanding California’s Supreme Court decision in the Dynamex case which created the “ABC” test. Under AB 5, the employer is required to pass a 3-prong test to determine if workers are employees or independent contractors. While there are some occupations exempt from AB 5, other occupations have asserted AB 5 does not apply to them. Musicians, fine artists, freelance writers, photographers and translators, those in the insurance industry, are among some of the occupations that believe they should be exempted from AB 5 so they can continue to work as independent contractors, not employees. Well they might just be in luck.
Assembly Bill 2257 (AB2257), if signed into law by Governor Newsom, will bolster certain industries by allowing them to be exempt from AB 5. (Notably, this will not help Uber & Lyft, who are still are challenging the application of AB 5 to their drivers.) AB2257 lays out specific parameters in order to meet the exemption. And remember, even if exempt from AB 5, doesn’t mean your worker is properly classified as an independent contractor. Employers should definitely seek the advice of counsel in order to ensure you are properly classifying your workers and establishing the necessary documentation to support your decision on classification. Contact the Employer Lawyers at Chauvel & Glatt to discuss your worker classifications and safeguard your business from misclassification lawsuits. In the meantime, we will keep you posted on Governor Newsom’s position on the new legislation modifying AB 5.
The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500.