After months of uproar, harsh criticisms and biting commentary from advocates representing various industries, Gov. Gavin Newsom signed AB 2257 into law on Sept. 4. The legislation is an AB 5 amendment bill, and it will go into effect immediately.
AB 2257 builds on the controversial worker misclassification law by clarifying which industries will be exempted from AB 5’s restrictions.
AB 5, which took effect in January of this year, reclassified millions of independent contractors in California to W-2 employees based on what the state calls “the ABC test” to comply with a 2018 state Supreme Court ruling called the Dynamex decision.
Exempted industries will now instead be classified by legal criteria called the Borello standard, which previously allowed more workers to operate as independent contractors in the state.
Professions added to AB 2257 exemptions include freelance writers, photographers, translators, visual artists, musicians, film support crews, real estate appraisers and insurance underwriters, among others. The bill also clarifies language regarding sole proprietors and adds new language regarding referral agencies.
Assemblymember Lorena Gonzalez (D-San Diego), author of both AB 2257 and AB 5, said, “AB 2257 represents a comprehensive framework for employment law that makes a clear distinction between employer-employee relationships and professionals that run their own independent businesses.”
Gonzalez said the amendment bill was based on “long standing precedent” developed in case law over the past 30 years.”
“The legislation was a product of robust dialogue over the last year with workers and businesses from every part of the state and reflects the main principles found in the Dynamex decision,” she added.
Independent contractors and freelancers have been pushing back against AB 5 since it was first announced in 2019, prompting fear of job losses that were later exacerbated by the pandemic. Throughout the 2020 legislative year, Gonzalez had meetings with various industries regarding the bill’s exemptions.
AB 2257 also ensures that workers who are subject to “undue control and direction from their employer” or could not satisfy the previous Borello standard are covered by the ABC test, according to Gonzalez’s statement.
Those workers who have been reclassified are now entitled to benefits, including worker’s compensation, overtime pay, paid time off, and more.
