AB 5, the labor-backed bill to put the Dynamex decision in statute, cleared the Assembly Appropriations Committee in early May and will soon be heard by the full Assembly. Amendments were added to the bill to provide for a general exception for licensed professionals such as accountants, dentists. architects and others so long as they meet certain conditions, an exemption for hair and nail salons and language specifically applying Dynamex to unemployment insurance decisions, thus extending the decision beyond wage orders. The bill already contained specific exemptions for insurance agents and brokers, emergency room doctors, direct sellers like Mary Kay and stockbrokers.
Negotiations on additional amends and exemptions are ongoing. It is expected that the final language for the bill will be completed when the bill is heard in the Senate Labor and Employment Committee in late June or early July.
Independent truckers and Teamsters are reportedly negotiating provisions for the trucking industry. The California Chamber of Commerce is working on a general liberalization of the strict ABC Test to provide businesses more flexibility. There is also now a coalition of gig economy workers consisting of ride-share workers, dietary consultants, engineers, lawyers, therapists and others who have advanced degrees, are licensed by the state or simply want to remain independent contractors who are seeking additional exemptions.
The recent Ninth Circuit Court decision applying Dynamex retroactively is sure to produce additional concerns relative to this bill amongst Senators.
CPSA is working on the bill. We are supporting amends that would clarify that service professionals can share accounts where businesses are unable to provide service due to volume or geography. We are also in favor of allowing more flexibility in the strict ABC Test as provided in other states that use the same standard. “The challenge is to develop a balance between allowing legitimate business arrangements and not allowing the underground economy to adversely affect those businesses that play by the rules,” said John Norwood, CPSA’s lobbyist.
We will keep you updated as more information is available.
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