Companies in the Golden State will face strict new regulations over their use of independent contractors after Gov. Gavin Newsom signed a bill into law, which will go into effect on Jan. 1, 2020.
According to a report by the LA Times, supporters say the law will reduce the misclassification of workers as independent contractors, who aren’t eligible for benefits such as health insurance and sick leave.
The new law uses a 2018 California Supreme Court decision to establish criteria for classifying workers. Under the law, a worker must be considered an employee when:
The new employee rules will not apply to several professions, including:
Other professions are exempt with certain conditions:
While the new law tries to set strict standards for classifying workers, several industries could create some enforcement challenges. The City of San Diego recently filed a lawsuit against the grocery delivery company Instacart saying it has wrongfully classified workers.
The complexities of the law may be a challenge for companies leading up to and after it goes into effect in January. An experienced employment law attorney here in California can help employers review their policies over worker classification and how the new law may impact them.