Employment standards: independent contractors and employees.
The key implications of AB 1928 would significantly alter how businesses assess worker classification. It will remove the assumption that workers rendering services are employees unless proven otherwise, leading to increased challenges in demonstrating independent contractor status. Consequently, employers may need to adapt their operational structures to comply with the new classification criteria, which could either ease employment flexibility for some or complicate compliance for others across various sectors. This could also affect workers' access to benefits typically associated with employee status, such as unemployment insurance and workers’ compensation.
Assembly Bill 1928 aims to amend California's labor laws regarding the classification of workers as independent contractors or employees. Specifically, it seeks to repeal the current ABC test established in the Dynamex case and instead utilize the multifactor test outlined in the Borello decision. This change signifies a shift from a presumption of employee status under the ABC test to a more complex evaluation of factors for determining independent contractor status. The bill is introduced as urgent due to the immediate need to address disruptions in employment relationships caused by existing regulations, which many believe have adversely impacted thousands of workers.
There exists considerable contention surrounding AB 1928, with proponents arguing that the current ABC test restricts flexibility in the gig economy and undermines independent business operations. Critics, however, warn that reverting to the Borello test might allow employers to misclassify workers, depriving them of crucial rights and protections afforded to employees. The urgency declared within the bill indicates pressing concerns about economic stability and the rapid transformation of job roles, asserting the need for immediate legislative action to mitigate negative impacts on the labor market.