“...codifies, clarifies and grants exemptions to a 2018 California Supreme Court decision called Dynamex. Both AB5 and Dynamex make it harder for companies to label workers as independent contractors. They use an ‘ABC’ test that says workers are employees if (A) they perform tasks under a company’s control, (B) their work is integral to the company’s business and (C) they do not have independent enterprises in that trade. It takes effect Jan. 1.”(2020)
The intent of this legislation is to protect people working as independent contractors from being taken advantage of. It is based on situations where an independent contractor’s work may match that of an employee but due to their worker status, they are not receiving the same level of pay and benefits as an employee. This is a good thing. The downside, however, is placing limitations on certain classifications of work that causes hardship. For instance, under this new law California-based publications can only allow freelance journalists to write 35 articles for them per year. This is a big hit to a freelance journalist’s income.
According to the MBO Partners State of Independence in America 2019 report, there are “41 million Americans working work as consultants, freelancers, contractors, temporary, or on-call workers.” These workers deserve fair compensation and this legislation serves to right some of those wrongs. We hope that the California legislature – and any other government body seeking to make similar changes – considers that the nature of work itself is changing.