If you have kept up with employment law at all over the last few years in California, then you know there has been significant debate about what it means to be an independent contractor. There has been years of back and forth over whether or not companies are taking advantage of independent contractors or “gig workers.” After the state passed a law more specifically defining how companies are allowed to use independent contractors, this law was effectively overturned by a voter referendum. Here, we want to briefly discuss what the rule is supposed to be surrounding independent contractor use because this plays a major role and the benefits that you, as a worker, should receive from the employer.
What Is Assembly Bill 5?
California Assembly Bill 5 was passed by the legislature in an effort to codify court rulings that laid out the ground rules for how employers had to determine whether or not their employees are independent contractors. AB 5 was signed into law by Governor Gavin Newsom in September of 2019 and went into effect on January 1, 2020.
AB 5 Expanded on a ruling made at the California Supreme Court in 2018 in the Dynamex Operations West, Inc. vs. Superior Court of Los Angeles case. Essentially, AB 5 notifies the following three-prong test to assume that workers are employees unless:
- The worker is free to perform their services without control or direction from the employer.
- The worker is performing tasks that are outside of the employer’s usual business activities.
- The worker is customarily engaged in an independently established occupation, trade, or business of the same nature as the work there performing for the employer.
AB 5 and the Court ruling was an attempt to try to keep employers from using independent contractors as regular employees, thereby avoiding paying them the various types of benefits that employees usually receive. This includes workers’ compensation protections, overtime rules, minimum wage requirements, and more.
Was AB 5 Overturned by Voters?
In response to AB 5, major gig worker companies like Uber and Lyft supported California Proposition 22, a ballot initiative that sought to give voters the chance to allow certain companies to continue to use workers as independent contractors and not employees. Under Prop 22, gig worker companies did agree to certain types of protections for workers, including healthcare subsidies and accident and accidental death insurance. Proposition 22 passed in November of 2020 with 58% of the support of California voters.
Contact an Attorney
If you have any questions about whether or not you are an independent contractor or an employee, you need to speak to an Orange County employment attorney as soon as possible. Despite all the noise surrounding AB 5 and Prop 22, the reality is that many employers continue to blatantly classify workers as independent contractors when they should be classified as employees. This is purely for the benefit of the employer in many situations, and you need to be aware of whether or not you are losing benefits under this arrangement.
An attorney and examine your case and determine whether or not you are entitled to any type of compensation for the way you had been classified. This could include compensation related to back pay, interest on unpaid wages, compensation for any work injuries you may have sustained, lost benefits, and more.
