Changes to California law involving a worker’s status (independent contractor vs. employee) have gained much attention from companies with operations in California. Before April 2018, a worker’s status was based on a multi-factor test outlined in S.G. Borello & Sons, Inc. vs. Department of Industrial Relations. Last year, the California Supreme Court in Dynamex Operations West, Inc. vs. Superior Court, replaced the Borello multi-factor test with a more restrictive test (known as the “ABC test”). Under Dynamex, workers are presumably employees unless the company meets the ABC test.
Reviewing further, the California Assembly expanded the ABC test placing more burden on the hiring entity in an attempt to protect workers. Assembly Bill No. 5 (“AB 5”) added Section 2750.3 to the California Labor Code changing worker’s status for all companies operating in California. The effective date of this new law is January 1, 2020.