AB5 and Adverse Effects for those it is Meant To Protect
As a freelance worker I decided to do some research on AB 5. Now I really know what it means to have
To get you familiar with the bones of the matter I compiled some excerpts from that page, as well as others that are all cited after selected quoted texts.
First, some clarification on two prior cases that set the stage and are referred to often:
Borello
The Borello test is a requirement list outlining the qualifications of whether a worker could be classified as an independent contractor versus a full-time employee. It was the standard for classifying workers in the state of California before the ABC test.
It came from S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989)
"We ordered review to decide whether agricultural laborers engaged to harvest cucumbers under a written "sharefarmer" agreement are "independent contractors" exempt from workers' compensation coverage. fn. 1 Our answer has implications for the employer-employee relationship upon which other state social legislation depends. fn. 2
The grower claims the "sharefarmer" harvesters are independent contractors under the statutory "control-of-work" test, because they manage their own labor, share the profit or loss from the crop, and agree in writing that they are not employees. After taking evidence on the nature of the work relationship, the Division of Labor Standards Enforcement (Division) of the Department of Industrial Relations rejected these contentions. The superior court found that the Division's decision was supported by the evidence. However, these rulings were reversed by the Court of Appeal.
Like the Division and the superior court, we find the grower's arguments unpersuasive. The grower controls the agricultural operations on its premises from planting to sale of the crops. It simply chooses to accomplish one integrated step in the production of one such crop by means of worker incentives rather than direct supervision. It thereby retains all necessary control over a job which can be done only one way.
Moreover, so far as the record discloses, the harvesters' work, though seasonal by nature, follows the usual line of an employee. In no practical sense are the "sharefarmers" entrepreneurs operating independent businesses for their own accounts; they and their families are obvious members of the broad class to which workers' compensation protection is intended to apply. [48 Cal. 3d 346]
We therefore conclude as a matter of law on the undisputed facts that the "sharefarmers" are "employees" entitled to compensation coverage. Accordingly, we reverse the judgment of the Court of Appeal."
Excerpt from : https://law.justia.com/cases/california/supreme-court/3d/48/341.html
———————————————
Dynamex
California’s 2018 Supreme Court case, Dynamex Operations West, Inc. vs. Superior Court of Los Angeles
"In 2004, a misclassification lawsuit was filed against a package and document delivery company called Dynamex which had converted all of its delivery drivers from employees of the company to independent contractors. The company used this tactic to cut costs at the expense of its own workers. Drivers continued to perform essentially the same job, but without the protections afforded under the California Labor and Unemployment Insurance Codes and wage orders.
In April 2018, the California Supreme Court issued the landmark decision Dynamex Operations West, Inc. v. Superior Court of Los Angeles which unanimously ruled in favor of the drivers and based its ruling on a three part “ABC” test used to determine employment status in other states." (https://www.californiansforthearts.org/ab5-about-blog/2020/2/7/ab-5-fact-sheet-from-assemblywoman-lorena-gonzalez )
"AB 5 codifies and expands the “ABC test” set forth by the California Supreme Court decision in the Dynamex Operations v. Superior Court case setting a new standard for determining whether workers in California should be classified as employees or independent contractors.
Taking effect on January 1, 2020, AB5 is further clarification of California’s 2018 Supreme Court case, Dynamex Operations West, Inc. vs. Superior Court of Los Angeles (4 Cal.5th 903).
The Dynamex case held that there is a general presumption that most workers are indeed employees, and should be classified as such. It placed the burden of proof for hiring entities to classify individuals as independent contractors under what is known as the three-part AB5 ABC test. The ruling and the newly signed bill require businesses to use the ABC test in determining whether a worker is an employee or an independent contractor." https://www.dir.ca.gov/dlse/faq_independentcontractor.htm