California AB-5 law for independent contractors went into effect Jan 1

[chrisjchrisj]

Thanks again, I have read it. I understand the employer has the burden of proof that the contractor shouldn't be an employee, I just need clarification on if the "bonified" business entity that I contract with performs work that is NOT outside the usual course of the (my company) business, in other words both companies do the same type of work, how can the burden of proof that the contractor's bonified company shouldn't be an employee be shown?

 

[PayrollHRGuy]

If your contractor meets these guidelines you should be fine...

(A) The individual maintains a business location, which may include the individual’s residence, that is separate from the hiring entity. Nothing in this subdivision prohibits an individual from choosing to perform services at the location of the hiring entity.
(B) If work is performed more than six months after the effective date of this section, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in their profession.
(C) The individual has the ability to set or negotiate their own rates for the services performed.
(D) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individual’s own hours.
(E) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.
(F) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.

 

[FlyingRon]

for some reason, I don't think that is what the law is about

That's EXACTLY what this law is about. The abuses they are targetting are there because workers were willing to be exploited as contractors when they are de facto employees. Allowing employees to opt into further abuse won't fix the problem. It's a kin of allowing a non-exempt employee to decide he doesn't need to be paid overtime.

 

[LdiJ]

That's EXACTLY what this law is about. The abuses they are targetting are there because workers were willing to be exploited as contractors when they are de facto employees. Allowing employees to opt into further abuse won't fix the problem. It's a kin of allowing a non-exempt employee to decide he doesn't need to be paid overtime.

I agree, but someone who truly IS a contractor is still allowed to be treated as a contractor, even with the new law in place. PayrollHRGuy has demonstrated that in post 17 and that is what the OP needs to base any decision upon.

 

[westside]

That's EXACTLY what this law is about. The abuses they are targetting are there because workers were willing to be exploited as contractors when they are de facto employees. Allowing employees to opt into further abuse won't fix the problem. It's a kin of allowing a non-exempt employee to decide he doesn't need to be paid overtime.

As a practical matter, it's already looking to be a solution far more damaging than the problem.

 

[LdiJ]

As a practical matter, it's already looking to be a solution far more damaging than the problem.

How is it more damaging to force employers to obey the law?

 

[westside]

It's not the enforcement, it's the law itself. A whole lot of legitimate independent contractors are going to be unable to claim such status in CA. Not at all unusual for a law to protect one group at greater harm to another group. Especially not unusual in the PRCa.

 

[LdiJ]

It's not the enforcement, it's the law itself. A whole lot of legitimate independent contractors are going to be unable to claim such status in CA. Not at all unusual for a law to protect one group at greater harm to another group. Especially not unusual in the PRCa.

Clearly you did not read what PayrollHRGuy wrote in post number 17. If someone does not meet that criteria, then they are NOT legitimate independent contractors.

 

[westside]

Clearly you did not read what PayrollHRGuy wrote in post number 17. If someone does not meet that criteria, then they are NOT legitimate independent contractors.

They meet it in 49 states. The main beneficiaries to the law are lawyers and unions.

 

[FlyingRon]

That's not true, Westside. These workers are forced to be characterized as employees in some states. In some, places the dodge around the common carrier regulations is also thwarted. It's only because of significant political contributions that the feds haven't stepped in on the basis of the commerce clause.

Anyhow, that's our respective opinions, and the case is clearly headed to the courts for the constitutional determination.

Note that Uber as it currently exists has no future. The abuse of the "contractor" drivers is only a stop gap until the driverless system comes to fruition.

 

[LdiJ]

They meet it in 49 states. The main beneficiaries to the law are lawyers and unions.

No, they do not. The other states have very similar criteria and so does the federal government. This law does not benefit lawyers and unions absolutely don't need the law, their members are already employees or they wouldn't be in the union. If your guy doesn't qualify under CA's criteria then he never qualified under federal criteria either.

 

[chrisjchrisj]

There is Payroll HR guy's #17, A,B,C,D.E.F and there's:

• (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work
• (B) that the worker performs work that is outside the usual course of the hiring entity’s business
• (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity

So, which is it?

Also,
Regarding, "the main beneficiaries to the law are lawyers and unions", I'd say the state government benefits most, they don't like missing out on taxing employers and workers more and worker's tips tax that they may be missing, the state gains a lot with this law, I'd say. Additionally, it's unfortunate that those workers who want this law have to impose it on those workers who don't want it. Making it a workers' optional choice would help

 

[LdiJ]

There is Payroll HR guy's #17, A,B,C,D.E.F and there's:

• (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work
• (B) that the worker performs work that is outside the usual course of the hiring entity’s business
• (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity

So, which is it?

Also,
Regarding, "the main beneficiaries to the law are lawyers and unions", I'd say the state government benefits most, they don't like missing out on taxing employers and workers more and worker's tips tax that they may be missing, the state gains a lot with this law, I'd say. Additionally, it's unfortunate that those workers who want this law have to impose it on those workers who don't want it. Making it a workers' optional choice would help

Wow, you really do not understand what is going on at all do you? You don't understand that you have potentially (or actually) been breaking the law for many years and that your state (CA) has finally become fed up with it and has put measures in place to force you to honor the law.

 

[CdwJava]

There are already serious economic concerns as independent truckers may be shut out of business and some of the major trucking concerns here could be forced to move their businesses out of state (bye bye tax dollars). Though, there is also the question of whether a trucking company contracting workers from their HQ in AZ would then have to make them "employees" when they travel to and from CA. Couple this with new mandates for clean but fuel IN-efficient trucks, and we can expect everything to go up here in the near future. Though, many in the trucking industry expect they might be able to obtain a waiver for their industry given the economic impact of these changes.

There will be unintended economic consequences to this, and one of them will be that some people seeking extra money (like many Uber and Lyft drivers, Doordash and Grubhub folks, etc.), and truckers will be either forced out or severely curtailed.

 

[westside]

There will be unintended economic consequences to this, and one of them will be that some people seeking extra money (like many Uber and Lyft drivers, Doordash and Grubhub folks, etc.), and truckers will be either forced out or severely curtailed.

Thank you. This was my larger point. Nearly every law passed has positive and negative consequences. The idea that a functioning human being can't be trusted to make the call for him or her self whether they are being "abused" and need protected from a 2nd income by people who believe they can run that person's life better than he or she can. Wrongheaded at best, disgusting at worst.