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California AB 5: Possible Changes Coming

This article is reproduced with permission from Spidell Publishing, Inc.

Out of the dozens of bills introduced, which has the best chance of passing?

There have been dozens of bills introduced this year that would repeal or limit the application of AB 5 and/or would expand the exemptions from the ABC test. An ABC test exemption allows workers to be evaluated under the Borello right-to-control test for purposes of determining whether a worker is an employee or independent contractor.

The author of AB 5, Assemblywoman Gonzalez, has introduced AB 1850, which would make a host of changes to the current version of AB 5, including:

  • expanding the business-to-business contracting relationship to apply to individual workers (as opposed to a business entity) who perform labor or services for a contracting business;
  • revising the exemption requirements for still photographers, photojournalists, freelance writers, editors, and newspaper cartoonists; and
  • adding new exemptions for specialized performers, appraisers, videographers, photo editors, certified translators, copyeditors, illustrators, insurance-related workers, international exchange visitors, competition judges, and specified individuals involved with the music industry.

This is in addition to the dozens of additional bills that, if enacted, would:

  • repeal AB 5 and adopt a more flexible worker classification (SB 806);
  • adopt an alternative worker classification test in addition to the ABC test and the Borello right-to-control test (SB 1423);
  • postpone application of the ABC test until January 1, 2022 (SB 990);
  • expand the list of exemptions from the ABC test to include small businesses (independently owned and operated, not dominant in their field of operation, and with fewer than 100 employees and less than $15 million of average gross receipts) (AB 1925);
  • repeal AB 5’s ABC test and mandate the use of the Borello right-to-control test for purposes of determining whether a worker is an employee (AB 1928 and ACA 19);
  • provide employer protections for misclassified workers who filed unemployment insurance claims (AB 2457);
  • prohibit application of the ABC test for respiratory therapists and other medical personnel not already exempt from the ABC test during the COVID-19 state of emergency (AB 2489);
  • exempt freelance journalists from the ABC test without regard to the number of content submissions per year (SB 868);
  • extend the existing exemption for newspaper distributors/carriers indefinitely (AB 2796 and SB 867);
  • expand the business-to-business exemption to cover contracts with contracting businesses that are sole proprietors or limited partnerships (AB 3281);
  • prohibit franchisees from being deemed employees of a franchisor (SB 967);
  • expand the professional services or specific occupations exemptions to include:
    • music industry workers as well as expanding existing exemptions for freelance photographers, editors, newspaper cartoonists, etc., (AB 2257) and interpreters (including court interpreters) and translators (AB 2979 and SB 875);
    • livestock judges (AB 2497);
    • youth sports referees and umpires (AB 3185 and SB 963);
    • youth sport coaches (AB 2864);
    • health facilities that contract with companies that employ health care providers, including general acute care hospitals, acute psychiatric hospitals, and skilled nursing facilities (AB 2794 and SB 965);
    • pharmacists (SB 966);
    • timber operators, foresters, and professionals providing forested landscape services (AB 2572 and SB 975);
    • certified shorthand reporters (AB 3136);
    • physical therapists (AB 2458);
    • licensed clinical social workers, education counselors, and marriage and family therapists (AB 2793);
    • transportation network companies (e.g., Uber and Lyft) (AB 2822); and
    • land surveyors, landscape architects, geologists, geophysicists, and construction managers or planners (AB 2823 and SB 965); and
  • modify the exemption for salon workers. (AB 2465)

At this stage, the fate of any of these bills is unknown. It is most likely that Gonzalez’s clean-up bill (AB 1850) has the highest chance of success. However, we believe any of the AB 5-related bills would have small chance of passing.

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