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Oh, yes, it did … now what does that mean for you and me?

As employers, we have been navigating through the “Exempt” or “Non-Exempt” employee status for years. This new law targets how small businesses treat freelancers and independent contractors, leveraging tough restrictions. AB5 requires gig employees to have the same benefits and rights as “employees.” This includes minimum wages, sick leave, worker’s compensation and unemployment.

Are there exceptions?
Doctors, dentists and health care providers; lawyers, insurance brokers, architects, engineers, PI’s and accountants have exceptions.

What is the ABC Test?
A California worker can only be an independent contractor if each of these three factors is met.

  • A. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, practically and in the contractual agreement between the parties.
  • B. The worker performs work that is outside the usual course of the hiring entity’s business.
  • C. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

(The IRS and the State assume that a worker is an employee unless proven otherwise).

Is there confusion?
Yes, speaking with an employment law attorney might be a great place to start.

If you are failing to classify workers correctly it could mean fines, penalties and retroactive payment of wages.

Musicians and writers, should you be seeking advice? It is highly recommended!

Be Informed
There is plenty of discussion on this subject. Here is one article:

AB5 may ease caps for writers, photographers; more gig-law changes coming
Carolyn Said Feb. 6, 2020 Updated: Feb. 6, 2020 5:44 p.m.

Questions? Call us at (925) 284-7404 and ask to speak with Jay Lifson, Executive Director. He can also be emailed at jay@lafayettechamber.org.