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California: AB 5 Updates for Independent Contractors

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All Businesses with CA Independent Contractors

EFFECTIVE

As Indicated

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(888) 378-2456

On January 1, 2020, AB 5 went into effect. It essentially codified the ruling in Dynamex Operations West, Inc. v. Superior Court, which implemented an ABC test for determining whether a worker is an employee or an independent contractor. However, the bill also broadened the application of the ABC test and add a slew of exemptions for certain types of workers under certain circumstances.

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California: IMPORTANT Changes for Independent Contractors

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All Employers with CA Independent Contractors

EFFECTIVE

January 1, 2020

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AB 5 codifies the already existing Dyanamex “ABC test” for independent contractors. A significant difference between now and next year is that there will be exceptions for certain jobs and relationships that do not currently exist. Those exceptions will revert back to the Borello multi-factor test for determining independent contractor status. Another key difference from Dynamex is that AB 5 will apply for purposes of the Labor Code, Wage Orders, and Unemployment Insurance Code. Starting July 1, 2020, it will apply for purposes of workers’ compensation issues.

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California: Employers Face New Hurdles with Independent Contractor Classifications

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All Employers with CA Employees

EFFECTIVE

April 30, 2018

QUESTIONS?

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(888) 378-2456

In Dynamex Operations West, Inc. v. Superior Court (Lee), the California Supreme Court created a new test for determining whether a worker is an employee or independent contractor for purposes of wage and hour claims, making it one of the strictest standards in the country. A class action was filed against a delivery service employer who converted its employee drivers to independent contractors in 2004 for economic reasons. The class alleged, in part, that they were misclassified and Dynamex failed to pay overtime, provide itemized wage statements, and reimburse business expenses.