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California Assembly Bill 5 (AB5)

California Assembly Bill 5 (AB5) is a state statute which codified into law the results of a Supreme Court of California case, Dynamex Operations West, Inc. v. Superior Court, which found that most workers are employees and that the burden of proof for classifying workers as independent contractors falls on the hiring entity.

California Assembly Bill 5 (AB5) is a state statute which codified into law the results of a Supreme Court of California case, Dynamex Operations West, Inc. v. Superior Court, which found that most workers are employees and that the burden of proof for classifying workers as independent contractors falls on the hiring entity.

The bill was first introduced in December 2018 and was passed and signed into law in September 2019. The law took effect on January 1, 2020.

The ABC test

AB5 codifies the "ABC test" put forth in the Superior Court ruling on the Dynamex case.

  • Part A: Is the worker free from the control and direction of the hiring entity in the performance of the work, both under the contract for the performance of the work and in fact?
  • Part B: Does the worker perform work that is outside the usual course of the hiring entity's business?
  • Part C: Is the worker customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity?

If the answer to all three questions is "yes," then, statutorily, the worker in question is considered an independent contractor. Failure to meet all three conditions would classify a worker as an employee, entitling them to unemployment benefits and other rights and privileges.

This simpler, three-part test replaces the eleven-part Borello Test set forth in the California Supreme Court's 1989 ruling on the case of S.G. Borello & Sons, Inc. vs. Department of Industrial Relations.

Timeline

January 1, 2020
California Assembly Bill 5 put into effect.
September 18, 2019
Governor Gavin Newsom signs AB5 into law.

The new law “will help reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits,” Newsom wrote in a signing message released by his office.

September 17, 2019
AB5 is enrolled in the record and presented to Governor Gavin Newsom.
September 11, 2019
AB5 was passed in the California State Assembly (61-16)
September 10, 2019
AB5 was read a third time in the California State Senate. Senate passes AB5 (29-11) and orders vote to the Assembly.
August 30, 2019
Senate Appropriations Committee votes to amend and pass AB5 as amended.
July 11, 2019
AB5 read for second time and amended in the Senate. The bill was then re-referred to the Senate Appropriations Committee
June 12, 2019
AB5 referred to the Committee on Labor, Public Employment, and Retirement
May 30, 2019
AB5 read for the first time in front of the California state Senate

The bill was then sent to the Senate Rules Committee

May 29, 2019
AB5 read for third time in front of the Assembly, passed 59-15, and ordered to California Senate
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People

Name
Role
LinkedIn

Anthony Rendon

Bill sponsor

Ash Kalra

Bill sponsor

Buffy Wicks

Bill sponsor

Connie Leyva

Bill sponsor

Jose Medina

Bill sponsor

Kevin McCarty

Bill sponsor

Lorena Gonzalez Fletcher

Bill author

Maria Durazo

Bill sponsor

Mark Stone

Bill sponsor

Nancy Skinner

Bill sponsor

Rob Bonta

Bill sponsor

Todd Gloria

Bill sponsor

Wendy Carrillo

Bill sponsor

Further reading

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Documentaries, videos and podcasts

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Companies

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References

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