UPDATE — The California Assembly is currently drafting Assembly Bill 1850 that seeks to clarify the rules and modify the exceptions for employee classification created by Assembly Bill 5 discussed below. Check back for further updates.
In 2018, the California Supreme Court rendered its decision in the Dynamex case that significantly altered the rules used to classify workers as employees or independent contractors. In an attempt to “simplify the rules” and “help” workers in the gig economy the California legislature passed, and the Governor signed, Assembly Bill 5 (AB 5) in 2019. The bill codified the worker classification tests used by the California Supreme Court. Prior to the passage of AB 5 many industry lobbyists were busy in Sacramento getting exceptions and special rules included in AB 5. As a result, the worker classification rules are now very complex, have many exceptions and come with significant penalties for noncompliance. (more…)