Today in Sacramento, AB-1850 from Assembly Member Lorena Gonzalez (Dem) was introduced as the clean-up bill for #AB5, which classified many independent contractors as employees. This highly anticipated bill scraps the original verbiage, with Section 2750.3 of the Labor Code being repealed, if passed with a majority vote by the Assembly. Section 2750.3 would then be replaced with new exemptions and rules in place which would reinstate independent contractor status for many who lost it due to AB5.
While we work to understand the legal language of the new bill, we have noted changes to the requirements, and have listed the conditions below.
” A person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(1) If a business entity formed as a sole proprietorship,
partnership, limited liability company, limited liability partnership,
or corporation (“business service provider”) contracts to provide
services to another such business (“contracting business”), the
determination of employee or independent contractor status of the
business services provider shall be governed by Borello, if the
contracting business demonstrates that all of the following criteria
are satisfied:
(A) The business service provider is free from the control and
direction of the contracting business entity in connection with the
performance of the work, both under the contract for the
performance of the work and in fact.
(B) The business service provider is providing services directly
to the contracting business rather than to customers of the
l contracting business.
(C) The contract with the business service provider is in writing.
(D) If the work is performed in a jurisdiction that requires the
business service provider to have a business license or business
tax registration, the business service provider has the required
business license or business tax registration.
(E) The business service provider maintains a business location
that is separate from the business or work location of the
contracting business.
(F) The business service provider is customarily engaged in an
independently established business of the same nature as that
involved in the work performed.
(G) The business service provider actually contracts with other
businesses to provide the same or similar services and maintains
a clientele without restrictions from the hiring entity.
(H) The business service provider advertises and holds itself
out to the public as available to provide the same or similar
services.
(I) The business service provider provides its own tools, vehicles,
and equipment to perform the services.
(J) The business service provider can negotiate its own rates.
(K) Consistent with the nature of the work, the business service
provider can set its own hours and location of work.
(L) The business service provider is not performing the type of
work for which a license from the Contractor’s State License Board
is required, pursuant to Chapter 9 (commencing with Section 7000)
of Division 3 of the Business and Professions Code. “
As discussed with Assembly Member Lorena Gonzalez during our meeting, webcam performers work from their own private locations, set their own rates, plan their own schedule, advertise themselves and promote their services, and provide their own equipment. We are confident that webcammers will meet the new criteria for exemption, as recognized as sole proprietors.
After our legal team weighs in on the new criteria, we will share more information as it comes. If AB1850 passes through the California State Assembly as is, it will replace AB5, and restore independent contractor status for many in our community.
