Simple as "ABC," Assembly Bill 5 Becomes Law in California

Simple as “ABC,” Assembly Bill 5 Becomes Law in California

By Jaimee K. Wellerstein, Esq.

Yesterday, California Governor Gavin Newsom signed into law Assembly Bill 5 (AB5), the bill that aims to codify the ruling set forth in the 2018 California Superior Court case, Dynamex Operations West, Inc. v Superior Court of Los Angeles .

Introduced by Assemblywoman Lorena Gonzalez in January 2019, AB5 will implement Dynamex’s rigorous “ABC test,” requiring employers to prove their workers are actually independent contractors by satisfying all three of the following prongs:

A. The company must not be able to control or direct what the worker
does, either by contract or in actual practice; and

B. The worker must perform tasks outside of the hiring entity’s usual
course of the hiring entity’s business; and

C. The worker must be engaged in an independently established trade,
occupation, or business of the same nature as the work performed.

There are several licensed professions that are exempt from the bill, including private investigators.

AB5 was one of the most hotly debated bills by the Legislature this year. A number of powerful businesses, including Uber, Lyft and DoorDash, sought exclusions from AB5, and initiated an effort to get the issue on the ballot in 2020.

AB5 goes into effect January 1, 2020.

Governor Newsom agreed he would continue discussions with leaders from the Legislature, the labor movement, and the business community.

Employer Takeaway: Employers should take the time to examine their use of independent contractors, including independent contractor agreements, to ensure compliance with the ABC test, soon to be codified in the California Labor Code.

Have questions about your company’s use of independent contractors or any other pressing employment law issues? Your attorneys at Bradley & Gmelich LLP can help.


Jaimee Wellerstein

Jaimee K. Wellerstein, Esq. is a Partner and the firm’s Employment Team Head. Representing employers in all aspects of employment law, Ms. Wellerstein collaborates with her clients to develop proactive business and legal strategies to try to avoid workplace conflict and employment disputes. She provides legal advice and counsel to numerous businesses, including conducting individualized training programs for both management and employees. Ms. Wellerstein performs internal audits of her clients’ employment practices to ensure compliance with the rapidly-changing world of employment laws, and guides investigations of employee allegations regarding harassment, discrimination, and employee misconduct.

When litigation cannot be avoided, Ms. Wellerstein aggressively defends her clients against employment law claims in the state and federal courts, as well as at administrative hearings, arbitrations, and mediations. Having defended numerous representative and individual lawsuits on behalf of her clients, Ms. Wellerstein is a skilled litigator and negotiator with a broad spectrum of experience upon which to draw.

A frequent speaker on numerous topics, including employment law and contract law, Ms. Wellerstein regularly conducts training seminars and programs for managers and employees in all areas of employment practices and policies.