Employee or Independent Contractor?

Is Foresight 2020? Employers Confront New Laws Taking Effect in the New Year

Photo by Jamie Street on Unsplash

From Littler, James A. Paretti, Jr. and Michael J. Lotito provide an outstanding overview of the laws affecting employers in 2020. The following are several relating to independent contractors. James and Michael write:

California

Law

Main Topic

Summary

Effective Date

AB 5

and

AB 170

Worker Classification:
Test for Determining Independent Contractor Status

Adopts as law the ABC test from the Dynamex v. Superior Court1 case as a way to classify whether workers are employees or independent contractors, based on whether the hiring entity controls the work, if the worker does tasks outside the usual course of the hiring entity’s business, and whether the worker performs similar work for other customers. Applies the ABC test to the wage orders, labor code, unemployment insurance code, and, effective 7/01/2020, workers’ compensation laws.  Creates seven broad categories of exceptions – occupations and industries for which the ABC test is not applied.  A related measure, AB 170, exempts newspaper distributors from these new requirements, but only until 2021.

1/01/2020,

in general

7/01/2020,

for purposes of workers’ comp

Colorado

Law

Main Topic

Summary

Effective Date

HB 1267

Wage & Hour: Classification of Employees, Wage Theft Penalties

Amends key definitions, enhances criminal penalties for wage theft, and clarifies how to classify workers as employees or independent contractors.

1/01/2020

New York

Law

Main Topic

Summary

Effective Date

New York City (Int. 136-A-2018)

Human Rights: Contingent Workforce

Clarifies that employers with four or more employees are covered by the city’s human rights law, and includes freelance workers and independent contractors.

1/11/202

Tennessee

Law

Main Topic

Summary

Effective Date

HB 539

Worker Classification

Codifies the IRS 20-factor worker classification test to determine whether a worker is an employee or an independent contractor under certain state statutes

1/01/202

Washington

Law

Main Topic

Summary

Effective Date

HB 1450

Noncompete Agreements

Voids noncompete covenants against employees earning less than $100,000 per year and independent contractors earning less than $250,000 per year from the party seeking enforcement. Requires employers to disclose terms of the noncompete in writing, presumes as unenforceable any restrictive period longer than 18 months, and requires employers to pay the employee’s base salary for the term of noncompete enforcement, among other provisions.

1/01/20

Read the full story at Is Foresight 2020? Employers Confront New Laws Taking Effect in the New Year | Littler Mendelson P.C.

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