From JDSupra, Benjamin Ebbink reports on recent developments relating to California Supreme Court’s decision in Dynamex including that “the Division of Labor Standards Enforcement (DLSE) issued an opinion letter that concluded the ABC test applies both to IWC Wage Order Claims and certain Labor Code provisions that enforce Wage Order requirements.” In addition, Benjamin discusses the progress in the legislation to address Dynamex. Benjamin writes:
Last August, there was an attempt by the business community to come up with a legislative solution to some of the difficulties created by this new standard, but that effort fizzled when legislative leadership announced that there would be no discussion of the issue in 2018. However, there is legislation moving forward this year which represents a vehicle for ongoing discussions with the business community concerning Dynamex. Assembly Bill 5 by Assemblymember Lorena Gonzalez (D-San Diego) was introduced early in the year and negotiations over its fate have been continuing for several months.
Recently, AB 5 passed the House after it was amended, indicating that negotiations are advancing, and to the benefit of some industries. Specifically, the bill now provides that the ABC test would not apply to the following (1) a person or organization licensed by the California Department of Insurance; (2) a physicians or surgeon licensed by the State of California; (3) a securities broker-dealer or investment advisor or their agents or representatives registered with the SEC or FINRA or licensed by the State of California; (4) a direct sales salesperson under Unemployment Insurance Code Section 650; (5) real estate licensees; (6) persons providing hairstyling or barbering services that meet certain conditions; and (7) certain specified “professionals” (law, dentistry, architecture, engineering, accounting, marketing, and human resources) that meet certain criteria. For these individuals, the analysis of employee or independent contractor status would generally be made under the previous Borello standard.
The business community continues to push for further amendments to the bill that would afford further Dynamex relief to business in a comprehensive manner, not just through industry-specific carve-outs. These include: (1) a broader exemption that would apply to many other professionals; (2) a broader exemption for individuals that prefer to make their own schedules with regard to the days and hours they work and make their own decisions regarding to whom they perform services; (3) an exemption for business to business contracts; and (4) preservation of the ability to subcontract for short-term projects and unexpected, immediate demands for additional help.
Negotiations over AB 5 continue in the hopes that it will provide some relief to the employer community, and we are likely to see revisions of some sort before the state Senate votes on the measure.