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August 14th, 2019
Employee Classification Update: California’s AB 5 Stalls in State Senate
Assembly Bill 5 ("AB 5"), which would expand Dynamex v. Superior Court's so-called "ABC Test" to all employment laws in California, suffered a surprising seatback on Monday in the state Senate's Appropriations Committee. If passed, the bill will severely restrict the use of independent contractors in California. But in a unanimous vote, the Appropriations Committee placed AB 5 into its “Suspense File” — blocking it from a full vote on the Senate Floor, its last stop before the Governor’s desk.
While the Appropriations Committee did not give an official reason for its decision, the Committee cited to three state agencies' estimates that implementation of AB 5 would increase each of their budgets by at least $2 million. The Committee also credited two state agency statements that their overall budgets would increase because AB 5 would require them to reclassify some of their current workers as employees rather than independent contractors. Most notably, Senator Jones (R Santee) said that Dynamex was one of the “worst” decisions by the California Supreme Court and that supporters of the bill will have to be “patient” with the legislature while it works on this law. Whether this move will permanently derail AB 5 remains to be seen. The Appropriations Committee is set to vote on the bill again on August 30th at which time it will take one of three actions: (1) send it to the Senate floor (with or without further amendments) for a full vote; (2) classify it as a "Two Year Bill" meaning no further action will be taken on AB 5 this year, but it would be eligible for reconsideration next year; or (3) hold it "In Committee" which essentially kills the bill.
Get ready to comply
Frankfurt Kurnit’s Employment Compliance, Training & Litigation Group will be holding roundtable discussions and workshops on the state of independent contractors in both New York and California. These workshops will include in-depth analysis of the Dynamex decision and possibly AB 5, as well as providing employers with real-world strategies for proper classification of California workers going forward. They will take place on October 22nd in Los Angeles and November 20th in New York, so mark your calendar and keep an eye out for our formal invitations. In the meantime, we will continue to monitor AB 5 and provide updates.
If you have any questions about AB 5, or other employment compliance matters, please contact Tricia Legittino at (310) 579 9632 or firstname.lastname@example.org, or any other member of the Frankfurt Kurnit Employment Compliance, Training & Litigation Group.
Other Employment Law Alerts
New York Readies Dramatic New Harassment Rules – What Are the Changes, and Are You Prepared to Comply?
The New York State Senate and Assembly recently passed a bill adding substantial additional protections for employees. The new law will provide additional protections for employees who allege sexual harassment; remove certain employer defenses; alter non-disclosure agreements; extend the statute of limitations for sexual harassment claims; and make changes to the laws governing sexual harassment policies and training. Read more.
July 9 2019
Mandatory Sexual Harassment Training Begins for Certain New York City Employers
April 1, 2019 is an important date for many New York City employers. On that date New York City employers with 15 or more employees (including contractors) who have worked more than 80 hours and at least 90 days in a calendar year, must begin providing mandatory sexual harassment training. Read more.
March 14 2019
California Employment Law Changes You Need to Know
A raft of legislative changes affect hiring practices, employment agreements, employee classification, training, and more. Here’s a handy summary. Read more.
January 28 2019