California Independent Contractor Bill Continues Slow March to Governor’s Desk

On May 29, 2019, Assembly Bill No. 5 (AB 5) passed a California State Assembly floor vote and headed to the senate. The bill would codify the “ABC” test announced this past year by the Supreme Court of California.

At present, the bill lays out a list of professional exemptions to the three-pronged ABC test. Under AB 5, the prior Borello test would continue to apply to “licensed insurance agents, certain licensed health care professionals [such as medical doctors and surgeons], registered securities broker-dealers or investment advisers, a direct sales salesperson, real estate licensees, workers providing hairstyling or barbering services, and those performing work under a contract for professional services.” As presently amended, the bill would “require the State Board of Barbering and Cosmetology to promulgate regulations for the development of a booth rental permit and a reasonable biennial fee upon workers providing specified hairstyling or barbering services, by no later than July 1, 2021.” Because the system of renting a booth is a commonly used arrangement in hair salons and spas, California employers with these types of working situations will likely want to follow changes and modifications to AB 5 as it moves through the senate.

Trade organizations and professional groups continue to lobby in Sacramento to join the list of exemptions to the ABC test, but it is unclear which categories of workers might be added to the growing list of professionals.