California ABC Test Applied to Contractors Likely to Turn Them into Employees

The California State Assembly recently passed a bill that would likely turn countless independent contractors into employees through the expanded application of the “ABC test.” The bill now needs to be passed by the California State Senate and signed into law by the Governor, but it is expected to not hit any resistance in either circumstance.

The ABC test requires an employer to ask three questions about a work:

  • Are they free from the company’s immediate control while working?
  • Are they doing work that is not the center of the employer’s business?
  • Are they owners of their own independent business in the same industry?

If the answer is ‘no’ to any of those three questions, then the conclusion is that the worker is an employee, not an independent contractor. While this change might seem small, it is expected to make a meteoric impact on major corporations and change the face of the gig economy in California forever.

Companies like Uber, Lyft, and even Amazon have long insisted their drivers are not employees, allowing them to avoid huge costs associated with hiring and keeping employees under state and federal law. For example, employees must be provided a minimum wage, be given workers’ compensation and healthcare, and have a chance to earn overtime in most cases. All of these employment benefits means increased operational costs for companies big and small. Even Google will likely feel the pressure from this law-in-the-works, as the conglomerate has more than 120,000 contractors, outweighing its only 102,000 or so full-time employees.

What Does the Bill Mean for You, The Average Worker?

AB5 is a huge victory for the average worker in California who is struggling to make ends meet as they jump from gig to gig in an economy built around occupations not meant to last. Thousands upon thousands of workers in the state may soon be handed employment benefits that not only increase their wages but also significantly lower their expenditures, such as removing the need to buy healthcare insurance out of their own expenses. Furthermore, the bill could act as the groundwork for similar bills written in other states, perhaps revolutionizing the gig economy all across the country only years after it began.

Upholding Your Rights & Protections in Northern California

At Polaris Law Group, we proudly stand up for workers like you in all manners of employment law cases. If AB5 turns into law and you work currently as an independent contractor despite fulfilling employment duties, then it is practically guaranteed that your employer is going to fight back and resist the changes. Let our employment lawyer, the highly experienced Bill Marder, act on your behalf and guide you to success if your employer does mislabel or is currently mislabeling you as an independent contractor. With more than 25 years of experience, our law firm is willing to take on major corporations like Google and Uber that scare off other firms!

Call (888) 796-4010 to request a free initial case consultation.

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