Legislation has been introduced to codify a recent California Supreme Court decision regarding independent contractors.
The decision, made last spring, significantly narrowed the definition of an independent contractor by imposing a much more strict test than had been used for the past few decades. The change is expected to require many companies to begin paying various taxes and benefits for more workers. In the pool/spa industry, it is expected to hit the service sector the hardest.
Business organizations such as the California Chamber of Commerce are seeking to negotiate with the author of Assembly Bill 5, Lorena Gonzalez, to make the test more flexible and, perhaps, gain exemptions for some larger industries.
The California Pool and Spa Association is also advocating flexibility in the so-called ABC test. The group would especially like less stringent language regarding the B portion, which states that a person cannot be considered an independent contract if they perform the same kind of work as the employer. CPSA would like to see, among other things, an allowance made for a service company to subcontract with another to perform work that the employees can’t.
CPSA is speaking with the chair of the Senate Labor Committee to lay some groundwork in case the bill passes the Assembly and moves to the Senate.
The organization hasn’t taken an oppose position against the bill, but instead is focusing on gaining flexibility. “We’re not advocating for or against independent contractor or employee [designations],” said John Norwood, CPSA’s director of government relations. “There are concerns that some people abuse independent contractors and the underground economy. If you’re going to use independent contractors, it needs to be done in a way that’s legitimate and so everybody is paying the appropriate taxes .”