Assembly Bill 5 has been haunting California employers, employees, and independent contractors for nearly a year now. This incredibly controversial law was established with good intentions, but the results have been less than stellar. After coming under significant pushback from employers, workers, and contractors, AB 5 has seen some adjustments. At Sacks Law Group, APC, we have been discussing this law for a while now. Here, our Los Angeles workers compensation defense attorneys want to discuss the latest changes to AB 5 and provide you with another reminder about how this can affect your business.
As a business owner in California, AB 5 may have forced you to make some changes regarding how you classify your workers. If you had previously made use of independent contractors, this law may have established new guidelines that meant you had to either hire those contractors as employees or stop using them altogether.
When AB 5 became law, it did establish various exceptions for some types of workers that could continue to be classified as contractors. However, these exceptions were narrow and often confusing for employers and workers alike. In the months following the passage of the law, there has been intense lobbying to amend AB 5.
Now, AB 2557 has been passed, which clarifies and changes previous exemptions. For example, AB 5 stated that freelance writers and photographers could only submit 35 pieces of work each year to each client, or they would no longer be considered contractors. That exemption has now been lifted, and freelance writers and photographers can continue operating as they did before the law was passed.
AB 2557 also adds exemptions for musicians, landscape architects, competition judges, referees, translators, and more.
The bottom line for employers is this – you need to be aware of which workers you can classify as independent contractors and which ones you must hire as employees if you wish to continue using their services. If you are a business owner, please carefully read through the text of both AB 5 and AB 2557 and ensure that you are properly classifying your employees.
As always, you must provide proper workers’ compensation benefits for any employees. Failing to provide your employees with workers’ compensation could result in significant penalties. This not only includes insignificant fines, but you could also face a stop-order on your business as well as individual criminal penalties.
If you operate a business in California, it is important that you understand all state and federal labor laws so that you remain compliant. This includes ensuring that your employees are covered by workers’ compensation. At Sacks Law Group, APC, our goal is to ensure that you are protected. If you have any questions for our Los Angeles workers’ compensation defense attorneys, we are standing by to help. You can contact us for a consultation of your case by clicking here or calling 310-216-7778.