Background On AB 5
On January 1, 2020, California enacted Assembly Bill 5 (AB 5), which was codified in California Labor Code section 2750.3. This law expanded the reach of the so-called “ABC Test,” which is a test courts use to determine whether a worker is properly classified as an independent contractor as opposed to an employee.
The “ABC Test” states that a person providing labor or services shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
- The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
- The person performs work that is outside the usual course of the hiring entity’s business;
- The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
AB 5 exempted the following occupations from the “ABC Test”:
- Insurance agents and brokers
- Doctors
- Podiatrists
- Dentists
- Psychologists
- Lawyers
- Architects
- Engineers
- Veterinarians
- Private investigators
- Accountants
- Securities brokers and investment advisors
- Direct salespersons
- Commercial fishermen
- Newspaper distributors
- Licensed real estate agents
- Repossession agents
Under certain conditions, AB 5 also exempted from the “ABC Test” the following occupations:
- Marketing professionals
- Human Resources professionals
- Travel agents
- Graphic designers
- Grant writers
- Fine artists
- Enrolled agents
- Payment processing agents
- Still photographers
- Photojournalists
- Freelance writers
- Editors
- Cartoonists
- Licensed cosmetologists
- Barbers
- Estheticians
- Electrologists
- Manicurists
- Graphic design
- Photography
- Tutoring
- Event planning
- Minor home repair
- Moving
- Home cleaning
- Errands
- Furniture assembly
- Animal services
- Dog walking
- Dog grooming
- Web design
- Picture hanging
- Pool cleaning
- Yard cleanup
AB2257 Adds More Exemptions to AB 5 and Modifies Others
On September 4, 2020, Labor Code section 2750.3 (AB 5) was repealed and replaced with AB 2257. The new law is now codified in Labor Code sections 2775-2787 and keeps AB 5’s basic framework intact. The “ABC Test” remains the default standard for determining whether a worker is an employee versus an independent contractor, but the new law adds more exemptions to this “ABC Test” and modifies others. The new occupations exempted from the “ABC Test” are:
- Certain recording artists
- Songwriters, lyricists, composers, and proofers
- Managers of recording artists
- Record producers and directors
- Musical engineers and mixers
- Certain musicians
- Certain vocalists
- Certain Photographers
- Independent radio promoters
- Certain licensed landscape architects
- Certain translators
- Certain copy editors
- Certain registered professional forestry workers
- Certain licensed real estate appraisers
- Certain home inspectors
- Certain insurance underwriting inspectors
- Certain auditors
- Certain manufactured housing salespersons
- Certain international and cultural exchange services workers
- Certain competition judges
- Certain digital content and feedback aggregators
- Certain master class performance professionals
Under AB 5, freelance writers, photographers, photojournalists, editors, and cartoonists were exempt only if they submitted content no more than 35 times a year. AB 2257 tweaked this provision by exempting these professions regardless of the number of content submissions they have per year.
AB 2257 also created additional business-to-business exemptions for wedding planners, consultants, and captioning.
Industries Excluded From AB 2257
AB 2257 does not include exemptions for gig economy companies like Uber and Lyft or the trucking industry despite their extensive lobbying efforts.
Get Help with Your Employment Status Conflicts Today
At Pimentel Law, we’re here to help you understand the nuances of employment law and your rights, whether you’re a contractor or an employee. We understand how confusing these differences can get, and our attorneys are here for you.
To learn more about California law AB 5 requirements and/or what the “ABC Test” for independent California contractor law entails, call us for a free consultation.