AB 1561 — 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. These exemptions include services provided by a licensed manicurist, subject to the manicurist meeting specified conditions. Existing law makes this exemption for licensed manicurists inoperative on January 1, 2022. This bill would extend the inoperative date of this exemption for licensed manicurists to January 1, 2025. Existing law exempts the relationship between a contractor and an individual performing work pursuant to a subcontract in the construction industry, if the contractor demonstrates that specified criteria are satisfied, including that the subcontractor is licensed by the Contractors State License Board and the work is within the scope of that license. Existing law, for construction trucking services, provides that the requirement of having this license does not apply to a subcontractor providing construction trucking services for which a contractor's license is not required, as specified. This provision applies to work performed before January 1, 2022. This bill would extend the applicable timeframe for this provision to work performed before January 1, 2025. Existing law exempts the relationship between a data aggregator and an individual providing feedback to the data aggregator, if certain conditions are satisfied. These conditions include, among others, that any consideration paid for the feedback provided, if prorated to an hourly basis, is an amount equivalent to or greater than the minimum wage. This bill would delete the above-described condition regarding the consideration paid. The bill would revise the exemption to instead apply to the relationship between a data aggregator and a "research subject," as defined, and would make related, conforming changes. Existing law also exempts a person or organization that is licensed by the Department of Insurance or a person who provides underwriting inspections, premium audits, risk management, or loss control work for the insurance and financial service industries. This bill would expand that exception to also apply to a person who provides claims adjusting or third-party administration, as defined. Existing law also exempts a manufactured housing salesperson, subject to specified legal obligations and regulations governing manufactured housing salespersons. This bill, in regard to the above exemption, would provide that the statutorily imposed duties of a manufactured housing dealer are not factors to be considered under the Borello test. This bill would incorporate additional changes to Section 2783 of the Labor Code proposed by AB 1506 to be operative only if this bill and AB 1506 are enacted and this bill is enacted last.

Bill Text

• Chaptered 09/30/21 - Chaptered Current pdf September 30, 2021
• Enrolled 09/14/21 - Enrolled pdf September 14, 2021
• Amended 09/03/21 - Amended Senate pdf September 03, 2021
• Amended 05/20/21 - Amended Assembly pdf May 20, 2021
• Introduced 02/25/21 - Introduced pdf February 25, 2021
• AB1561 View text html

Action History

1. September 30, 2021

   Chaptered by Secretary of State - Chapter 422, Statutes of 2021.

2. September 30, 2021

   Approved by the Governor.

3. September 20, 2021

   Enrolled and presented to the Governor at 3 p.m.

4. September 09, 2021

   Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 3038.).

5. September 08, 2021

   In Assembly. Concurrence in Senate amendments pending.

6. September 08, 2021

   Read third time. Passed. Ordered to the Assembly. (Ayes 38. Noes 0. Page 2504.).

7. September 07, 2021

   Read second time. Ordered to third reading.

8. September 03, 2021

   Read third time and amended. Ordered to second reading.

9. August 17, 2021

   Read second time. Ordered to third reading.

10. August 16, 2021

    From committee: Be ordered to second reading pursuant to Senate Rule 28.8.

11. July 13, 2021

    From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (July 12). Re-referred to Com. on APPR.

12. June 09, 2021

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

13. May 28, 2021

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

14. May 27, 2021

    Read third time. Passed. Ordered to the Senate. (Ayes 75. Noes 0. Page 1659.)

15. May 24, 2021

    Read second time. Ordered to Consent Calendar.

16. May 20, 2021

    Read second time and amended. Ordered returned to second reading.

17. May 19, 2021

    From committee: Amend, and do pass as amended. To Consent Calendar. (Ayes 15. Noes 0.) (May 19).

18. April 21, 2021

    In committee: Hearing postponed by committee.

19. April 08, 2021

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (April 8). Re-referred to Com. on APPR.

20. March 11, 2021

    Referred to Com. on L. & E.

21. February 26, 2021

    From printer. May be heard in committee March 28.

22. February 25, 2021

    Read first time. To print.

Sponsors

• Committee on Labor and Employment · Primary

Votes

Subjects