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.
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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.
January 1, 2020
September 18, 2019
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
September 11, 2019
September 10, 2019
August 30, 2019
July 11, 2019
June 12, 2019
May 30, 2019
The bill was then sent to the Senate Rules Committee
May 29, 2019
May 20, 2019
May 16, 2019
May 29, 2019
May 20, 2019
May 16, 2019
Gonzalez (D-San Diego) presented the bill, as amended on May 1, 2019, to the committee, which voted in its favor 5-0.
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.
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.
December 3, 2018
April 30, 2018
At issue was what standard applies in determining whether workers should be classified as employees or as independent contract for purposes of California wage orders.
Two drivers filed this purported class action alleging that Dynamex Operations West, Inc. had misclassified its delivery drivers as independent contractors rather than employees. The trial court ultimately certified a class action embodying a class of Dynamex drivers who, during a pay period, did not themselves employ other drivers and did not do delivery work for other delivery businesses or for the drivers’ own personal customers. The court of appeal upheld the trial court’s class certification order. The Supreme Court affirmed, holding (1) the trial court properly concluded that the “suffer or permit to work” definition of “employ” contained in the wage order may be relied upon in evaluating whether a worker is an independent contractor; (2) in determining whether, under the suffer or permit to work definition, a worker is properly considered the type of independent contractor to whom the wage order does not apply, it is appropriate to look to the so-called “ABC” test utilized in other jurisdictions; and (3) the trial court’s certification order was correct as a matter of law under a proper understanding of the suffer or permit to work standard.
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)
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.
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