One of the most important laws to go into effect in California on Jan. 1, 2020 is AB 5, which codified the Dynamex California Supreme Court case to clarify who is considered an independent contractor under state law. This bill addresses one of the biggest problems existing in today’s economy: the rampant misclassification of workers as contractors when they should actually be considered employees.
Employees have a host of benefits under current law including paid family leave and sick days, workers’ compensation if injured on the job, unemployment insurance and a guaranteed minimum wage. Independent contractors have none of these protections. So if a worker is misclassified, she’s losing out on wages and vital protections that provide security to her and her family.
Not every independent contractor will be considered an employee under the new law. In fact, legitimate contractors will not be affected at all. If you’re truly your own boss, AB 5 has no impact on you or the relationship you have with companies you’re contracting with. What the law will do is crack down on the illegal practice of misclassification, in which the company pockets money by stripping workers of protections they deserve under the law.
To help workers and employers navigate the new law, the California Department of Labor has posted a Q&A that explains the law in detail and answers many questions about to whom it applies and to whom it doesn’t.
Check it out here:
AB 5 implementation begins Jan. 1. However, there are still some issues that will continued to be worked on in the legislature. The main thing is that we enforce this landmark law to finally put an end to the illegal practice of misclassification that’s harming workers, communities and our state. That was the intent behind Dynamex, and AB 5 promises to add an important layer of protection to working people that will ultimately create stronger jobs and more security and safety at work for millions of Californians.