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Lots More AB 5 Exceptions

The California Legislature is sending a major group of exemptions from the Dynamex ABC test for differentiating between independent contractors and employees to the Governor for approval. It is an urgency measure and takes effect upon the Governor’s signature. He has indicated he will sign it.

As a reminder, California Assembly Bill 5 (AB5), sometimes called “The Gig Worker Bill,” went into effect on January 1, 2020. The bill requires companies that hire independent contractors and freelancers to reclassify them as employees if their jobs and duties meet certain conditions.

AB 2257 passed as an urgency measure, meaning it will take effect immediately when Governor Gavin Newsom signs it as is expected. The bill cleared the floors of both houses without any votes in opposition.

The bill’s final version added exemptions for:

  • youth sports coaches
  • specialized performers
  • home inspectors
  • insurance industry field service contractors
  • appraisers
  • underwriting inspectors
  • premium auditors
  • risk management, or loss control specialists
  • sports competition judges, umpires, and referees
  • graphic design
  • web design
  • tutoring
  • consulting
  • caddying
  • wedding planning & event vending
  • yard cleanup
  • captioning
  • interpreting and translating services.

The freelancer definition now covers:

  • fine artists
  • freelance writers
  • translators
  • editors & content contributors
  • advisors, narrators, cartographers, producers, copy editors
  • illustrators, and newspaper cartoonists working under written contracts

The bill also includes a provision distinguishing between the referral agencies and labor brokers. To qualify for the referral agency exemption, the contractor must possess the applicable license, permit, certification, or registration if there is one.

AB 2257 also expands the business-to-business definition to cover a relationship between two or more sole proprietors.

The Legislature also passed AB 323 by Assemblyman Blanca Rubio (D-Baldwin Park), which would allow newspaper publishers to continue classifying carriers as independent contractors for another year. The bill sought a two-year extension, but late amendments limited it to one year. The newspaper carrier exemption was negotiated along with AB 5 last year.

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