The California Senate voted Tuesday to approve a bill aimed at correcting “[t]he misclassification of workers as independent contractors.”
The bill, known as AB-5, comes after an April 2018 California Supreme Court decision that noted the overall problems with workers being misclassified as independent contractors.
Under the bill, workers will only be considered independent contractors if their employer can prove three things. First, the employer must prove that the worker is not under “the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.” Second, the employer must also prove that the worker “performs work that is outside the usual course of the hiring entity’s business.” Finally, the employer must prove that “[t]he person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
The bill does provide exceptions for specified occupations. The bill passed in the California Senate 29-11 and is set to be considered in the Assembly.