California Expands AB 5 Exemptions to Cover More Professional and Entertainment Services
In September 2019, the California legislature passed Assembly Bill 5. This landmark bill codified a prior ruling from the California Supreme Court adopting the so-called ABC Test in worker classification cases. The ABC test requires a “hiring entity” to prove that a given worker is an independent contractor–as opposed to an employee–based on three requirements. This replaced a prior rule used by California courts known as the Borello test, which required judges to weigh more than a dozen separate factors in deciding how to classify a worker.
AB 5 has not been without controversy. Many businesses continue to oppose the bill, as it forces them to reclassify many of their independent contractors as employees. But there has also been a significant backlash among many groups of workers who believe that the ABC Test is not a good fit for their particular industry.
To address these concerns, Gov. Gavin Newsom recently signed into law Assembly Bill 2257. This new bill expands the list of individuals and occupations exempt from AB 5 and the ABC Test. Indeed, it is important to note that many workers were already exempt under the original language of AB 5, including most licensed professionals.
One key change made by AB 2257 concerns “professional services,” including photographers, freelance writers, editors, and newspaper cartoonists. AB 5 exempted such workers only if they contributed no more than 35 submissions to a single outlet in a given year. AB 2257 eliminates the 35-submission limit altogether. It also expands the list of exempt professional services to include persons working as a fine artist, translator, content contributor, advisor, narrator, cartographer, producer, copy editor, or illustrator.
AB 2257 also carves out a new broad exemption for individuals working in the music industry, such as recording artists, songwriters, composers, lyricists, managers, record producers, audio engineers, and promoters.
There are many more professions and vocations addressed in AB 2257. If you have any questions about whether these changes to the law will directly affect you–or how AB 5 and AB 2257 will affect you more generally–it is best to speak with an experienced California employment law attorney.
Can You Still Be Misclassified if You Are Exempt from AB 5?
One thing to note is that even if a worker is exempt from AB 5, whether as originally written or as amended by AB 2257, that does not necessarily mean they should not be classified as an “employee.” The purpose of AB 5 was to confirm the Supreme Court’s use of the ABC test as a default. In cases where the ABC test does not apply due to a statutory exemption, the prior Borello test remains in force.
To put it simply, if you believe that you have been misclassified as an independent contractor, you may still be able to pursue legal action against the hiring entity. If you have questions about your classification status or believe you have been misclassified as an independent contractor, you should speak with a qualified California wage and hour attorney right away.