In September, California Governor Gavin Newsom signed Assembly Bill 5 (AB 5) into law, which codifies a strict set of requirements that employers must use for determining whether a worker is an employee or an independent contractor. Effective January 1, 2020, the law stems from a 2018 California Supreme Court case, Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which involved an employer that had reclassified its workers as independent contractors. AB 5 aims to prevent businesses from improperly misclassifying workers as independent contractors in order to sidestep employment laws that ultimately protect workers. With complaints being filed in federal court by opponents of the bill, ignoring it opens employers to significant potential liability.
