Sign Up for Alerts
Sign up to receive receive industry-specific emails from our legal team.
Sign Up for Alerts
We provide tailored, industry-specific legal updates to our clients and other friends of the firm.
Areas of Interest
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.
What happened?
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 tlegittino@fkks.com, or any other member of the Frankfurt Kurnit Employment Compliance, Training & Litigation Group.
Other Employment Law Alerts
FTC Bans Certain Non-Compete Agreements
The Federal Trade Commission (FTC) has approved a new Rule which bans for-profit employers from entering into post-employment, non-compete agreements with employees. By a vote of 3 to 2 the FTC determined that these non-compete agreements constitute “unfair competition” under the FTC Act. The Rule is effective 120 days after it is published in the Federal Register. Here’s what employers and executives need to know. Read more.
April 26 2024
New Ruling from the National Labor Relations Board May Require Significant Handbook Revisions
On August 2, the National Labor Relations Board issued a decision, Stericycle Inc. and Teamsters Local 628, that creates a new legal standard for how the NLRB will evaluate workplace rules and policies to determine if such rules interfere with employees’ protected rights to engage in concerted workplace activity under Section 7 of the National Labor Relations Act. Read more.
August 8 2023
New York Releases New Changes to its Model Sexual Harassment Policy and Training Video
On April 11, 2023, the New York State Department of Labor released updated versions of its sexual harassment model policy and training materials. Read more.
April 17 2023
