The legislative balancing act known as AB 5 teetered back and forth in the state legislature and the courts again this year.
The journey of AB 5 seems to have lasted longer than the three years since it was passed in 2019 in response to the 2018 Dynamex Operations West, Inc. v. Superior Court case decided by the state Supreme Court. AB 5 inspired more legal action than it resolved and additional proceedings poured in from every corner. There have been multiple variations of the measure sent through the legislative process. There was a virtual voter referendum on the November 2020 ballot that sliced away portions of the law.
Depending on how you look at it, the changes implemented by the legislature with Assembly Bill 1561 and signed into law by Governor Gavin Newsom on September 30, give some relief from the onerous provisions of another reactionary move—AB 2257—which was supposed to “fix” AB 5.
AB 2257 is the current state law regarding the “proper” classification of independent contractors and the application of the “ABC Test” pursuant to the state Supreme Court’s decision in Dynamex. The Supremes reiterated their support for the ABC Test in another case Vazquez v. Jan-Pro Franchising International, in February of 2021.
The legislature knew how the voters felt about the whole AB 5 rigamarole—they passed Proposition 22 by a nearly 59 percent yes vote—then saw it tossed out by Alameda County Superior Court Judge Frank Roesch, who ruled in August that two sections of Proposition 22 were unconstitutional and that the measure as a whole was unenforceable. That decision is being appealed.
To salve the restive Prop. 22 majority, the Assembly Committee on Labor and Employment dialed up AB 1561 which passed handily in both houses. The bill is a punt, kicking the AB 5 issue downfield. The subcontractors and construction trucking services, if they successfully negotiate a bunch of hoops, don’t have to kowtow to AB 5 or the state Supreme Court…until January 1, 2025 (to see these “hoops” see our story on Page 14).
Like almost all things legislative these days AB 1561 tries to conciliate multiple constituents at the same time. For example, the legislature also extended exemptions for independent contractors in some squeaky wheel industries, who do not have to follow AB 5 until 2025.
These exemptions include licensed manicurists, underwriters, auditors, claims adjustors, manufactured housing salespeople, and newspaper distributors and carriers (AB 1506).
By Ray Baca, Executive Director Email: [email protected]