Independent Contractors

2020 brings a slew of new employment laws, some of which make significant changes to existing law, and others which make minor updates but which nonetheless require employers’ attention. Below is a roundup of the main legal changes and key takeaways.

On September 18, 2019, Governor Gavin Newsom signed into law AB-5, sweeping legislation that will affect the proper employment classification of over a million California workers who currently work as independent contractors. AB-5 codifies and expands the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal.5th 903 (2018), which adopted the “ABC test” in holding that a company classifying an individual as an independent contractor bears the burden of justifying that individual’s independent contractor classification.

As previously reported, just over a year ago, the California Supreme Court issued a sweeping decision instituting a new test, called the “ABC test,” to determine whether a worker is properly classified as an independent contractor instead of an employee. On May 3, 2019, the California Department of Labor Standards Enforcement (DLSE), issued an opinion letter providing California employers with further insight on how the Labor Commissioner’s Office plans to apply the ABC test.