California Governor Gavin Newsom has signed into law a bill codifying a recent California Supreme Court decision that upended the state’s independent contractor law.
In 2018, the California Supreme Court significantly narrowed the definition of an independent contractor by changing the test to determine whether an individual qualifies. In Dynamex Operations West Inc. vs. Superior Court, it established a so-called ABC test whereby they must meet all three criteria: The individual must control their own work; perform work outside the company’s usual course of business; and be engaged in an independently established trade, occupation or business.
The decision left companies spinning, worried the test would apply retroactively if a worker were to file a complaint, since it came down through a court decision as opposed to legislation.
This legislative session, Assembly Bill 5 was introduced to make the ABC test a matter of statute.
The law does not take effect until July 1, 2020, so the ABC Test must be followed in the meantime, advised the California Pool & Spa Safety Association.
Ride-sharing firms such as Uber and Lyft were not able to receive exemptions similar to those seen by other industries, causing them to vow a fight, potentially through ballot initiative. Other groups have threatened lawsuits.
“This issue is far from over,” CPSA said.