Assembly moves amended independent contractor bill to Senate

AB 5 introduced by Assemblywoman Lorena Gonzalez (D-San Diego), a bill that would codify the California Supreme Court’s holding in Dynamex Operations West, Inc. v. Superior Court passed out of the Assembly last week on a 59-15 vote.

The Court’s decision in Dynamex applied a three-prong standard called the ABC test which replaced the old standard for determining whether a contractor is properly classified in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (Borello).

The ABC test makes it more difficult for newspapers to classify their workers as independent contractors, especially carriers and freelancers.

AB 5 is being closely watched throughout the Capitol because it is also the vehicle that will include negotiated exemptions for certain types of workers from the Dynamex ruling.

Immediately prior to the Assembly floor vote, AB 5 was amended to exempt from the ABC test hairdressers, real estate agents and professionals licensed by the state, e.g. lawyers, doctors and accountants. Insurance agents, securities brokers and direct sellers were exempted several weeks ago.

Although the exempt categories of workers in AB 5 would not be required to comply with the ABC test, they would still need to meet an alternate set of standards that are consistent Borello.

A group of CNPA member publishers met with Assemblywoman Gonzalez yesterday to discuss the need to add exemptions that would cover carriers and freelancers. She said she understood the problem for newspapers and said she was inclined to try to find a way to provide a solution but offered no specifics.

In earlier comments describing her approach to the bill, Assemblywoman Gonzalez said “I’m committed to striking a balance so we can extend critical employment protections to more workers while separating groups that genuinely function as small businesses.”

A coalition of business groups, including CNPA, have taken a support if amended position on AB 5 with the goal of amending the bill to exempt additional classes of workers from the “ABC test.”

AB 5 is in the Senate awaiting referral to its first policy committee – the Labor and Employment Committee.