As the New Year approaches, new laws will become effective, and few are as anticipated of having an impact as AB 5 (Gonzalez) to implement the “ABC test” standard for determining independent contractor classification. This Employment Status Law will take effect on January 1, 2020.
Under this new law, a recent California Supreme Court decision known as Dynamex, which set up the “ABC test,” will be codified into California statute. The “ABC test” is a three-pronged standard that assumes the worker is an employee of the hiring entity unless all of the following are met:
(a) the worker is free from control and direction in the performance of services
(b) the worker is performing work outside the usual course of the business of the hiring company
(c) the worker is customarily engaged in an independently established trade, occupation, or business.
To prepare for the influx of inquiries as businesses seek to comply with this new law, the California Labor and Workforce Development Agency (LWDA) announced a new online resource to provide information and answers to frequently asked questions to ensure compliance with the “ABC test.” These online resources can be accessed at https://www.labor.ca.gov/employmentstatus/.
The LWDA is pegging this website as a “one-stop-shop for online resources for workers and employers, and the Labor Agency and its departments…are coordinating the information and services about this new law and its enforcement.”
In addition to information about the “ABC test,” the website contains information on labor laws and employee rights, which includes links on how to file a wage claim or retaliation complaint, report a health and safety violation, or apply for workers’ compensation, unemployment or disability benefits. The LWDA mentions “Employers who visit the portal will be able to find information to assist them in determining the employment status of their workers and understanding their legal obligations as employers, including information regarding workplace health and safety laws, wage and hour laws, workers’ compensation obligations, and payroll tax requirements.”
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