As soon as California passed the landmark law known as AB 5, people were discussing changes. The goal of AB 5, according to its supporters, was to crack down on misclassification by instituting a much stricter definition of what it means to be an independent contractor vs. an employee. This helps ensure workers are not denied key benefits, such as paid time off and a living wage.
Just one year later, AB 5 is seeing some sweeping changes that could affect countless workers across dozens of important industries.
The backbone of AB 5 is the ABC Test. Under this principle, a worker is presumed to be an employee – meaning they should receive all required benefits and protections of such a classification – unless their employer can prove three specific conditions are met.
The original law included a handful of exceptions. A very small number of workers (including engineers, lawyers, commercial fishers and accountants) were exempt from this ABC Test.
Under a new bill signed into law in September of 2020, the list of exempt professions becomes much longer. This includes:
If you’re doing this type of work, you may qualify as an independent contractor – not an employee – under a more relaxed standard than the ABC Test.
Two things are certain. First, this law will continue to evolve in the years ahead. It’s important to stay informed and understand when it might affect you.
Second, employers will keep trying to skirt the law in the name of profits. Businesses often like to see what they can get away with, and simply hope their mistreated workers remain quiet.
But this update to AB 5 is not an excuse for employers to misclassify workers and deny rightful benefits. Individuals in those exempt professions might still qualify as an employee under California law. If you believe you have been misclassified, legal recourse may be possible.