Here Comes Enforcement Of AB 5. Are You Ready?

January 15, 2020
Sacks & Zolonz, LLP
employers workers compensation defense

We have discussed AB 5 for a while now and this law is now in effect. As of January 1, 2020, many workers in California’s “gig economy” now must be reclassified as employees. However, there have been several lawsuits that have protected this change for certain workers. Regardless of whether you think your business is affected by AB 5, you need to be sure you are following the law because the state’s budget proposal sets aside millions of dollars for enforcement. At Sacks & Zolonz, LLP, our Los Angeles workers compensation defense attorneys want to discuss what this enforcement means.  

AB 5 is in effect 

Assembly Bill 5 has made some dramatic changes concerning who can be classified as an independent contractor and who must be classified as an employee. The law codifies the state Supreme Court decision that makes it more difficult for employers to classify certain workers as independent contractors. 

The goal of the bill, according to co-sponsor Lorena Gonzalez (D-San Diego), was to compel tech companies, particularly Uber and Lyft, to convert drivers from independent contractors to employees. However, the effects of AB 5 are far-reaching and go well beyond the tech sector. 

For anyone wondering whether this law will be enforced, you can stop wondering. Gov. Newsom’s Budget proposal includes an additional $17.5 million for the Department of Industrial Relations to:

  • Assume an increased workload associated with more workers’ compensation claims
  • Anticipate an increase of investigations of labor law violations related to worker classification

If you have regularly used independent contractors, you need to be very familiar with this new law and how it applies to your business. AB 5 does make exceptions for certain types of workers to remain independent contractors, but there are not many exceptions. Just because there are several lawsuits ongoing against the state regarding this law does not mean you can ignore AB 5. The consequences of not having workers’ compensation insurance for your workers can be severe. 

As we have continually reported, failing to have workers’ compensation insurance for your employees could result in a misdemeanor offense that is punishable by up to one year in jail along with a fine of $10,000. This could also result in a stop order being enforced on your business, as well as a fine for every employee you had during the period you were uninsured. 

Let us get you through this

If your business is facing penalties, or if you are facing criminal charges, for failing to maintain workers’ compensation, seek legal assistance as soon as possible. At Sacks & Zolonz, LLP, our qualified and experienced team is ready to help you get through this. We will thoroughly investigate the claims being made against you and conduct our own investigation. Our goal is to get the charges and fines against you reduced or dismissed so you can get back to running your business. When you need a workers’ compensation lawyer in Los Angeles, you can contact us for a consultation on your case by clicking here or calling 310-216-7778.

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