Changes to AB5 Brings Relief for Some But Not All

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Ever since the passage of AB5, numerous industries have taken aim at changing the law. Some of the bigger challenges have come from the transportation sector, including not just Uber and Lyft, but also from the trucking industry as well. As these challenges continue, both through the courts and proposed ballot initiatives for November, the law saw a recent change that provides relief for some but leaves many still in the same difficult place.

On September 4, 2020, California passed AB2257. The law adds several jobs to the list of those exempt from AB5, including many in the arts, such as writers and musicians. For these workers, they can now operate as independent contractors if they qualified as such prior to the passage of AB5 (ie. Under the previous multi-factor Borello test).

However, the law does nothing further to assist those outside of these newly added jobs. In particular, this means Lyft and Uber drivers, as we all as those in California’s large trucking industry continue to be subject to AB5. This means most, if not all, drivers will be deemed employees rather than independent contractors, as they’d previously been operating.

In response, as companies also wait to see how the legal decisions regarding AB5 will play out, and whether a November ballot initiative can successfully alter the law, companies are doing all they can to comply. This includes enhancement processes that provide methods for companies to restructure in order to comply, if at all possible, with the stringent requirements of AB5 in order to qualify certain workers as independent contractors.

While AB5 now how over 100 job exemptions, the law still has far reaching implications across California’s employment sector. The ongoing alterations to the law also mean that diligent attention must be paid to the landscape of employment law in the state. With the impact of AB5 ever-changing, an experience legal team can help navigate a potentially confusing and ever-evolving time for businesses, particularly with the ever-changing landscape for companies during the current pandemic.