While it remains uncertain how Assembly Bill 5 will influence employer-employee relationships long-term, we now have insight to the immediate impact on the California workforce. Since going into effect on January 1, the law has been the subject of national scrutiny and met with a number of lawsuits from industries including trucking, media, and technology.
Aimed to prevent worker misclassification, the law codifies the landmark California Supreme Court Dynamex decision making it very difficult for employers to treat workers as independent contractors, thereby entitling them to benefits including minimum wage, paid sick leave, unemployment benefits, and more.
Under AB5, businesses evaluate employer-worker relationships using a three-part ABC test to identify qualifying services and determine status. It includes various profession exemptions and additional tests for employers to determine if an exemption applies in order to qualify a worker as an independent contractor.
Supporters applaud the law’s intention and progress toward securing worker rights. However, critics have countered that the complexities of the law consequently result in businesses opting to sever relationships rather than delve into specifications or risk misinterpreting and misclassifying.
Perhaps the most vocal opposition has come from organizations including the California Trucking Association, the American Society of Journalists and Authors, and the National Press Photographers Association, as well as app-based companies such as Uber and Postmates who have taken legal action against the new lawin an effort to enact change.
In response to the first month of push-back, AB5’s author, Assemblywoman Lorena Gonzaleaz, announced on February 6 her upcoming plans for “a number of asks, initiatives and bill language to help ease the implementation of AB5 and make clarifications to the law based on hundreds of meetings and discussions with individuals and groups.”
With these pending developments and the undoubtedly continued calls for repeal or additional modification to address the immediate impact of the new lawCalifornia employees have felt, it is even more imperative California employees decipher their correct classification.
Those who have previously or currently are working as a 1099’ed independent contractors, should closely examine their role and employer-worker relationship to fully understand how the law affects their industry and position.
Determining correct classification will ensure you are – and in the event of any modifications, continue to – receive the benefits and protections you are guaranteed. Misclassified workers may also be entitled to back wages and other damages.
If you need help understanding your legal options and protections in this area, contact Keller Grover for a free consultation. In more than 25 years litigating fraud and employment cases, the lawyers at Keller Grover have recovered hundreds of millions for clients and class members.