What You need to Know about Converting Independent Contractors to Employees under California AB-5 – #GIGeconomy

On September 18, 2019, California Governor Gavin Newsom signed into law A.B. 5, solidifying a tighter standard of rules for classifying a worker as an independent contractor. The new standard, known as the Dynamex standard, codifies and expands the earlier California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles. It  replaces the former Borello test, and puts in place a more simple three-pronged ABC test. The significant effect is that many workers in California will now be classified as employees instead of independent contractors (also informally known as “1099” workers). This change is one of the most significant disruptions to California employment law in decades. The law took effect on January 1, 2020. FIND OUT how to comply with this law by downloading our easy-to-understand instructions.

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BREAKING NEWS: Many Workers Now Classified as Employees, Not Independent Contractors

On September 18, 2019, California Governor Gavin Newsom signed into law A.B. 5, codifying a tighter standard of rules for classifying a worker as an independent contractor. The new standard, known as the Dynamex standard, codifies and expands the earlier California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles. It  replaces the former Borello test, and puts in place a more simple three-pronged ABC test. The significant effect is that many workers in California will now be classified as employees instead of independent contractors (also informally known as “1099” workers). This change is one of the most significant disruptions to California employment law in decades. The law has now gone into effect as of January 1, 2020.

The new law is convoluted, and has numerous exceptions for various professions, as discussed in further detail below. To further complicate matters, the law codifies Dynamex for purposes of claims made under the California Labor Code, Unemployment Insurance Code, and wage orders, but curiously does not mention the California Government Code, under which workers may seek redress for harassment and discrimination, among other things.

In addition, the newly created exemptions to the ABC test will apply “retroactively to existing claims and actions to the maximum extent permitted by law.”

In order to ensure that your company’s workers are properly classified (in order to avoid substantial fines and expensive misclassification lawsuits), contact a qualified employment law attorney as soon as possible to ensure you are complying with the law and following the new rules.

What Is the Potential Impact of This Change?

According to the LA Times, “State Capitol Democrats and organized labor say their new ‘gig’ law will correct the misclassification of 1 million California workers who are falsely deemed independent contractors.”

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Valentine’s Day Special- $150 Off Employment Law Packages

New Year’s has come and gone, and we are now six weeks into 2016!  Haven’t had time to update your Employee Handbook, policies and procedures, or personnel files? The Grady Firm is here to help!

In order to show love to our deserving customers, we are offering a discount of $150.00 off our employment law advising packages through February 29, 2016.  To find out more about our services, book a time to speak with our employment law attorneys, or call 323-450-9010 by the end of the month, and mention this promotion.

Has Your Company Been Keeping Track of Accrued Paid Sick Leave Time Since January 1?

As you may be aware, on July 1, 2015, a new law affecting millions of Californians went into effect requiring that employers – both public and private – provide paid sick leave to all their employees. Under the new law, employers will have to modify or update existing paid sick leave or time off policies, as well as payroll, record-keeping, wage statement, and employee notice procedures.

In addition, employers are required to provide most employees with an individualized Notice to Employee  (required under Labor Code section 2810.5) that includes paid sick leave information.

Has your company been providing its employees with notice of the amount of paid sick leave its employees are entitled to on each wage statement in 2016?

If you have questions about an employer’s responsibility to provide sick leave and notice of hours earned to its employees, The Grady Firm attorneys can review your company’s policies to ensure they are in compliance. Schedule a time to speak with our employment law department today.