AB 5 Spotlight - Spidell

AB 5 Spotlight


From Spidell’s Tax Season Tribune 4/5/20

AB 5: Online resources

It feels like a million years have passed since AB 5 was on everyone’s minds. Here’s a quick update on some new resources.

The FTB has developed a gig economy web page that they will update as more information becomes available:

https://www.ftb.ca.gov/file/business/industries/gig-economy.html

The California Labor and Workforce Development Agency created a web page with resources for workers and employers:

https://www.labor.ca.gov/employmentstatus/


From Spidell’s Tax Season Tribune 3/22/20

AB 5: Don’t accuse the legislators of not trying…

One more bill related to AB 5 has surfaced, bringing the total number of bills (at least by our tally) seeking to change or repeal AB 5 to 33.

AB 2075 (Kiley) would prohibit application of the ABC test until January 1, 2021, for purposes of determining an employer’s liability.

You can read the full bill text here.

Also, we’ve put together a webinar for March 26, COVID-19 and Filing Extensions: What Tax Pros Need to Know, where you’ll get details on the Families First Coronavirus Response Act and extended tax season deadlines. Click here for more information and registration details.


From Spidell’s Tax Season Tribune 3/8/20

AB 5: Federal DOL opinion letter

Contrary to AB 5, a DOL opinion letter (FLSA 2019-6) was issued to an unidentified virtual marketplace company that was an online and/or smartphone-based referral service that connects service providers to end-market consumers to provide services directly to the consumers.

Although the letter only applies to the company to which it was issued, the DOL noted that these types of virtual referral companies frequently connect providers and consumers to provide transportation (think Uber), delivery (think Grubhub), cleaning, household services, and even plumbing (think TaskRabbit). These companies may use the guidelines laid out in the letter to help structure their company’s business model.

Legislation update: The exemption introduced by SB 868 has been modified to now include photographers and videographers in addition to freelance writers, editors, and newspaper cartoonists.

If you need more information on Dynamex and AB 5, attend Spidell’s 2020 Post-Tax Season Update and Review Seminar. Click here for more information and registration details.


From Spidell’s Tax Season Tribune 3/1/20

AB 5: More proposed exemptions and a repeal

A few more bills were introduced that seek to expand the exemptions under AB 5:

  • AB 1850 (Gonzalez): Would revise the criteria for the professional services exemption for still photographers, photojournalists, freelance writers, editors, and newspaper journalists;
  • AB 2979 (Voepel): Would expand professional services exemption to include interpreters and translators (including court interpreters);
  • AB 3136 (Voepel): Would expand specified occupations exemption to include certified shorthand reporters;
  • AB 3185 (Lackey): Would expand specified occupations exemption to include referees or umpires working for independent youth sports organizations;
  • AB 3281 (Brough): Would expand the business-to-business exemption to cover contracts with contracting businesses that are sole proprietors or limited partnerships; and
  • SB 806 (Grove): Would repeal AB 5 and adopt a more flexible worker classification. Click here to view this bill.

If you need more information on Dynamex and AB 5, attend Spidell’s 2020 Post-Tax Season Update and Review Seminar. Click here for more information and registration details.


From Spidell’s Tax Season Tribune 2/23/20

AB 5: The bills keep rolling in

Last week, we reported on a handful of bills that would provide exemptions to AB 5 for certain industries. This week, there is more than a handful more:

  • AB 2457 (Melendez) would add pharmacists to the specified occupations exemption;
  • AB 2458 (Melendez) would add physical therapists to the specified occupations exemption;
  • AB 2465 (Gonzalez) modifies the exemption for salon workers;
  • AB 2489 (Choi) prohibits franchisees from being deemed employees;
  • AB 2497 (Bigleow) is an AB 5 spot bill;
  • AB 2572 (Dahle) would expand specific occupations exemption to include timber operators, registered forest professionals, geologists, geophysicists, and surveyors;
  • AB 2750 (Bigelow) is another AB 5 spot bill;
  • AB 2793 (Mathis) would expand the specified occupations exemption to include licensed marriage and family therapists;
  • AB 2794 (Mathis) would expand the specified occupations exemption to include health care facilities (as defined) that contract with companies that employ health care providers who provide services to patients at those facilities;
  • AB 2796 (Fong) would extend indefinitely the specified occupations exemption for newspaper distributors and carriers;
  • AB 2822 (Waldron) would expand the specified occupations exemption to include transportation network companies;
  • AB 2823 would expand the specified occupations exemption to include land surveyors, landscape architects, geologists, geophysicists and construction managers or planners; and
  • SB 1236 (Stern) is yet another AB 5 spot bill.

As these bills continue through the legislative process, we’ll keep you updated. In the meantime, if you need information on AB 5 and Dynamex, we will be covering this topic at our 2020 Post-Tax Season Update Seminar starting in May. Click here for more information and registration details.


From Spidell’s Tax Season Tribune 2/16/20

AB 5: No injunction for Uber and Postmates; new exemptions proposed

A U.S. district court judge denied a request by Uber and Postmates for a temporary injunction against applying AB 5 to them, stating the court “cannot second guess the legislature’s choice to enact a law that seeks to uplift the conditions of the majority of nonexempt low income workers.” (Olson, et al. v. State of California, et al. (February 10, 2020) U.S. District Ct., Central Dist. of Calif.) The lawsuit is still pending, but for now because there is no exception for their drivers, Uber and Postmates may have to reclassify their workers as employees.

Also, bills have been introduced to provide for the following exemptions:

  • SB 963: Expands specific occupations to include youth sports referees and umpires;
  • SB 965: Expands specific occupations to include health facilities that contract with companies that employ health care providers, including:
    • General acute care hospitals
    • Acute psychiatric hospitals
    • Skilled nursing facilities
  • SB 966: Expands specific occupations to include pharmacists
  • SB 967: Prohibits franchisees from being deemed employees of a franchisor
  • SB 975: Expands specific occupations to include timber operators, foresters, and professionals providing forested landscape services


From Spidell’s Tax Season Tribune 2/9/20

AB 5: Trucking industry spared for now

A federal district court temporarily blocked the application of AB 5 to any motor carrier, including truckers, operating in California, until the courts have had the opportunity to rule on whether AB 5 is preempted by federal law. (California Trucking Association, et al. v. Becerra, U.S. Dist. Ct., Southern Dist. of Calif., Case No. 2:19-cv-10645 and Case No.: 3:18-cv-02458-BEN-BLM)

On January 16, 2020, the court extended the preliminary injunction so the judge could further review the issue. There is no set date, and a ruling could come tomorrow or months from now. However, whatever the ruling, the losing side will no doubt appeal the decision.

If you need more information on Dynamex and AB 5, attend Spidell’s upcoming live webinar “AB 5: Who is an Independent Contractor?” on February 14. An on-demand version is also available. Click here for more information and registration details.


From Spidell’s Tax Season Tribune 2/2/20

AB 5: The legislative floodgates are open

AB 5 was enacted quickly with many questions and potential problems. In the past few months, we have seen lawsuits filed, and the flurry of bills being introduced is only the beginning. Here are the latest bills that address AB 5:

  • AB 1850 (Gonzalez) is a “spot bill” that could adopt a variety of changes to AB 5;
  • AB 1925 (Obernolte) would expand the list of exemptions from the ABC test to include small businesses;
  • AB 1928 (Obernolte) and ACA 19 (Kiley and Melendez) would repeal AB 5’s ABC test and mandate the use of the Borello right-to-control test for purposes of determining whether a worker is an employee;
  • SB 867 (Bates) would extend the existing exemption for newspaper distributors/carriers indefinitely;
  • SB 868 (Bates) would exempt freelance journalists from the ABC test without regard to the number of content submissions per year;
  • SB 875 (Grove and Jones) would provide an exemption for interpreters (including registered court interpreters) and translators; and
  • SB 881 (Jones) would exempt musicians and music industry professionals.

At this stage, the fate of any of these bills is unknown. However, we believe any that would repeal AB 5 have little to no chance of passing.

If you need more information on Dynamex and AB 5, attend Spidell’s upcoming live webinar “AB 5: Who is an Independent Contractor?” on February 14. An on-demand version is also available. Click here for more information and registration details.