Governor Gavin Newsom on Sept. 1 signed AB 2257 as an urgency measure, so that it took effect immediately after it passed unanimously in both houses of the state Legislature.
If you remember, AB 5 set a new standard for hiring independent contractors, requiring many to be reclassified as employees covered by minimum wage, overtime, workers’ compensation, unemployment and disability insurance. It created a threepronged test that needs to be satisfied to determine if someone is an independent contractor or an employee.
To be independent contractors under AB 5’s “ABC test,” workers must (A) work independently, (B) do work that is different from what the business does, and (C) offer their work to other businesses or the public. All three conditions must be met.
It is prong B that’s problematic, as for example a freelance writer working for a publication would not be doing something different than the business does. The law set limits on the amount of income someone can receive while doing this kind of work before being considered an employee.
Exemptions under new law
AB 2257 preserves the ABC test for independent contractor classification, but adds a number of exemptions from this test.
To the right are the professions now exempt from AB 5, meaning that they can be considered independent contractors and not have to be treated as employees under the law.
CONTRACTORS NOW EXEMPT FROM AB5
- Youth sports coaches
- Specialized performers
- Home inspectors
- Insurance industry field service contractors
- Underwriting inspectors
- Premium auditors
- Risk management or loss control specialists
- Sports competition judges, umpires and referees
- Graphic design
- Web design
- Wedding planning and event vending
- Yard cleanup
- Captioning, and
- Interpreting and translating services.
FREELANCERS NOW EXEMPT FROM AB 5
- Fine artists
- Freelance writers
- Editors and content contributors
- Advisors, narrators, cartographers, producers and copy editors
- Illustrators and newspaper cartoonists working under contracts
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