AB 1850 — Worker classification: employees and independent contractors.

Summary

Existing law requires a 3-part test, commonly known as the "ABC" test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity's business, and the person is customarily engaged in an independently established trade, occupation, or business. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification. Existing law exempts specified occupations and business relationships from the application of the ABC test described above. Existing law, instead, provides that these exempt relationships are governed by the multifactor test previously adopted in the case of S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. Existing exemptions include a bona fide business-to-business contracting relationship, as defined, under the specified conditions. Under existing law, the business-to-business exemption does not apply to an individual worker, as opposed to a business entity, who performs labor or services for a contracting business. This bill would delete that individual worker provision. Existing exemptions include the relationship between a referral agency and a service provider, as defined, under the specified conditions. If a business entity formed as a sole proprietor, partnership, limited liability company, limited liability partnership, or corporation ("service provider") provides services to clients through a referral agency, the referral agency is required to demonstrates that certain criteria are satisfied, including that, if the work for the client is performed in a jurisdiction that requires the service provider to have a business license or business tax registration, the service provider has the required business license or business tax registration. The exemption does not apply to an individual worker, as opposed to a business entity, who performs services for a client through a referral agency. This bill would revise the criteria to be satisfied, including requiring the referral agency to check the validity of one license in a location where the service provider performs work a minimum of one time per calendar year. The bill would delete that individual worker provision. The referral agency exemption defines "referral agency" as a business that connects clients with specific listed service providers, including tutors. This bill would revise the definition of "referral agency" to include a business that connects clients with service providers such as those listed in the definition. The bill would revise the definition of tutor. The bill would add youth sports coaching as a listed service provider and define the term. Existing exemptions include persons providing professional services under specified circumstances, including services provided by still photographers, photojournalists, freelance writers, editors, and newspaper cartoonists who do not license or provide, as applicable, content submissions more than 35 times annually to a putative employer. This bill would additionally exempt professional services of a specialized performer hired by a performing arts company or organization to teach a master class, as defined, for no more than one week, and an appraiser. This bill would delete the existing professional services exemptions for services provided by still photographers, photojournalists, freelance writers, editors, and newspaper cartoonists. The bill would, instead, establish an exemption for services provided by a still photographer, photojournalist, videographer, or photo editor, as defined, who works under a contract that specifies certain terms in advance, as long as the individual providing the services is not replacing an employee performing the same work at the same volume, the individual does not primarily perform the work at the hiring entity's business location, and the individual is not restricted from working for more than one hiring entity. The bill would establish an exemption for services provided to a digital content aggregator, as defined, by a still photographer, photojournalist, videographer, or photo editor. The bill would establish an exemption for services provided by a freelance writer, certified translator, editor, copyeditor illustrator, or newspaper cartoonist who works under a contract that specifies certain terms in advance, as long as the individual providing the services is not replacing an employee performing the same work at the same volume, the individual does not primarily perform the work at the hiring entity's business location, and the individual is not restricted from working for more than one hiring entity. Existing exemptions include listed occupations, including a person or organization who is licensed by the Department of Insurance. The bill would additionally exempt professional services of a person who provides underwriting inspections, premium audits, risk management or loss control work for the insurance industry. The bill would additionally exempt an individual who is engaged by an international exchange visitor program, as prescribed, and a competition judge with a specialized skillset or expertise providing services that require the exercise of discretion and independent judgment to an organization for the purposes of determining the outcome of a competition. The bill would additionally exempt certain occupations in connection with creating, marketing, promoting, or distributing sound recordings or musical compositions.

Bill Text

• Amended 05/12/20 - Amended Assembly Current pdf May 12, 2020
• Amended 02/27/20 - Amended Assembly pdf February 27, 2020
• Amended 02/14/20 - Amended Assembly pdf February 14, 2020
• Introduced 01/06/20 - Introduced pdf January 06, 2020
• AB1850 View text html

Action History

1. July 01, 2020

   Referred to Com. on L., P.E. & R.

2. June 11, 2020

   In Senate. Read first time. To Com. on RLS. for assignment.

3. June 11, 2020

   Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 4822.)

4. June 04, 2020

   Read second time. Ordered to third reading.

5. June 03, 2020

   From committee: Do pass. (Ayes 18. Noes 0.) (June 3).

6. June 02, 2020

   In committee: Set, first hearing. Referred to APPR. suspense file.

7. May 21, 2020

   From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (May 20). Re-referred to Com. on APPR.

8. May 13, 2020

   Re-referred to Com. on L. & E.

9. May 12, 2020

   From committee chair, with author's amendments: Amend, and re-refer to Com. on L. & E. Read second time and amended.

10. March 02, 2020

    Re-referred to Com. on L. & E.

11. February 27, 2020

    From committee chair, with author's amendments: Amend, and re-refer to Com. on L. & E. Read second time and amended.

12. February 18, 2020

    Re-referred to Com. on L. & E.

13. February 14, 2020

    From committee chair, with author's amendments: Amend, and re-refer to Com. on L. & E. Read second time and amended.

14. February 14, 2020

    Referred to Com. on L. & E.

15. January 07, 2020

    From printer. May be heard in committee February 6.

16. January 06, 2020

    Read first time. To print.

Sponsors

• Jeff Gonzalez · Primary

Votes

Subjects