Santa Cruz SBDCAptos, CA

A Roadmap for AB 5: California's New Law on Worker Classification

The CalChamber's White Paper is "an excellent explanation of the new AB5 law covering independent contractors."

When Governor Gavin Newsom signed Assembly Bill 5 (AB 5) on September 18, 2019, it significantly altered the way California law distinguishes between employees and independent contractors. Not only did AB 5 codify the California Supreme Court's decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal. 5th 903 (2018) (Dynamex) — it also expanded it. Stated simply, AB 5 makes the new worker classification test established in Dynamex the general rule in most circumstances, though it does create several exceptions. For those exempted, the common law classification test will apply. Given these exemptions and the stricter worker classification standards per this new California law, it's important for employers to understand both standards, when to apply each standard and when the law goes into effect.

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Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA or HSU Sponsored Programs Foundation.