A Southern California lawmaker said her bill that would write into the Labor Code the three-part test to determine employee status created by the state’s high court last year is declarative of existing law in the Golden State.
Assemblywoman Lorena Gonzalez, D-San Diego, said language in Assembly Bill 5 that would codify the so-called “ABC Test” the state Supreme Court created in Dynamex West Operations v. Superior Court was “a declaration of existing law,” according to a report by the Los Angeles Times.
Gonzalez told the newspaper she doesn’t want to interfere with legitimate contracting arrangements. She said she wants to make sure employees receive benefits to which they’re entitled.
“We don’t want to stop true independent contractors from having their own little business,” she said. “But we don’t want to continue this farce of large businesses declaring their people are independent contractors.”
She also told the newspaper about plans to introduce amendments to the bill as early as today.
The high court in April 2018 said that for the purposes of wage-order claims, businesses must prove their workers are not employees by satisfying three conditions:
Courts have held that the Dynamex decision is limited to wage-order disputes. AB 5 would write the three-part test from the decision into the Labor Code for the purposes of resolving all disputes over whether a worker is an employee.
If enacted, the bill would result in the ABC Test from Dynamex replacing the 10-part test from a 1989 high court decision in S.G. Borello & Sons Inc. v. Department of Industrial Relations for deciding who is an employee and entitled to work comp benefits for an industrial injury.
Meanwhile, Assemblywoman Melissa Melendez, R-Lake Elsinore, introduced AB 71, which would require the use of the 10-part test from S.G. Borello & Sons to resolve all disputes about whether a worker is an employee or contractor.
Hearings have not been scheduled for either AB 5 or AB 71.
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George Corson Mar 27, 2019 a 2:03 pm PDT
I think the Dynamex Test is a little restrictive for WC, but do believe that everyone benefits from transparency and consistency. At present, Borello could find an Applicant to be a Contractor w/o WC Benefits, and Dynamex could determine the Applicant to be an Employee for Wages/Overtime. That is inconsistent, and legally troubling when advising both parties after the fact. One standard would make planning and liability more predictable.
Mar 27, 2019 a 3:12 pm PDT
I haven't analyzed the issue in any depth but the Borello test was introduced before the technology boom, which completely changed how people work. We should have an updated test in light of the modern workforce and not a test that was written before it. My concern with the Dynamex test though is it seems overly simplistic, whereas the Borello test seemed more comprehensive. Perhaps Borello is timeless and remains good law notwithstanding when it was introduced?