AB5 – New Independent Contractor Law

Watch my FREE AB5 WEBINAR on-demand to learn about “AB5 and the ABC Test for independent contractors.” What You Will Learn In this AB5 webinar you will learn about: The new ABC test for independent contractors. Which professions/categories of workers are exempt from the ABC test. How to keep those excepted categories independent contractors. Consequences for misclassifying workers, including individual liability. What you can do to minimize exposure. Did You Get a Letter from the EDD? California companies received a letter from the EDD about AB5 (Assembly Bill 5) and the ABC test in Dynamex v. Superior Court. Many business owners are hearing about the expansion of the new independent contractor test for the first time just days before the law went into for the New Year on January 1, 2020. Are you trying to wrap your head around the new AB5 rules and asking the following questions? Do I have to convert independent contractors to employees? Can I keep independent contractors as contractors? How do I keep independent contractors a contractors? What are the risks of misclassifying independent contractors? Background AB 5 was the big bill to watch this year. … Continue reading

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New Independent Contractor Test: 3 Clarifications from the Court of Appeal

If your business uses independent contractors at all, you have probably heard about Dynamex Operations West, Inc. v. Superior Court and the new “ABC Test” to analyze whether a worker is an employee or an independent contractor. You were probably worried about whether your independent contractors pass the ABC Test. You are justified in worrying because the new test makes it much more difficult for someone to be classified as an independent contractor. This then opens the door for claims of misclassification, for missed meal break and rest break penalties, and unpaid overtime because that’s what you paid your hourly workers but not your independent contractors. Your business may be sitting on a 5 to 6-figure time bomb.   ABC Test Recap If you have not heard about Dynamex or the ABC Test, or if you need a recap, here it is. Under this new independent contractor test, a worker is properly considered an independent contractor to whom the applicable wage order does not apply if the hiring entity establishes all of the following: (A) that the worker is free … Continue reading

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New Independent Contractor Test Could be Game Changer

The California Supreme Court recently published an opinion that describes a new independent contractor test that is broader than the current independent contractor test.  The “Borello” multi-factor test has been applied for decades, and this new test makes it harder for businesses to properly classify a worker as an independent contractor. This opinion will affect many businesses that hire independent contractors within the State of California. The main take away from this opinion, Dynamex Operations W. v. Super. Ct., Cal. is this: There is a new independent contractor test for purposes of the obligations imposed by a wage order. Here is a breakdown to help understand the preceding statement: What are wage orders? In California, employment laws are spelled out in different places, including statutes, case law, and wage orders. This case specifically addresses the obligations that are imposed on employers by the wage orders that apply to different industries. These wage orders address issues such as the payment of wages (minimum wage), regulating meal and rest breaks, and the number of hours worked (overtime pay), for example. Since these wage … Continue reading

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Independent Contractor Misclassification

A few days ago, Uber agreed to pay up to $100 million to settle class-action lawsuits in California and Massachusetts claiming that its drivers are employees not independent contractors. Paying out $100 million is by no means the end of this story. The settlement does not affect other drivers’ ability to sue on the same grounds nor does it preclude the Labor Commissioner from determining that individual drivers are in fact employees (which it has done in at least one case). The U.S. Department of Labor also recently issued a formal interpretation of the federal Fair Labor Standards Act as it pertains to the classification of independent contractors. This advisory opinion signaled the intention of federal regulators to scrutinize independent contractor classifications and treat most workers as employees. Most companies do not have enough independent contractors to be subject to class action lawsuits worth $100 million, but how will a $1 million lawsuit or even a $100,000 lawsuit affect your business? If your company uses independent contractors, here are some steps you could take to minimize your exposure: Closely examine … Continue reading

In: California Civil Litigation, Contracts, Employment Law | Leave a comment