| 1 | 1 | | CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 231Introduced by Assembly Member NguyenJanuary 12, 2021 An act to amend Section 2778 of the Labor Code, relating to employment. LEGISLATIVE COUNSEL'S DIGESTAB 231, as introduced, Nguyen. Worker classification: employees and independent contractors: licensed manicurists.Existing law requires a 3-part test, commonly known as the ABC test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entitys business, and the person is customarily engaged in an independently established trade, occupation, or business. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification.Existing law exempts specified occupations and business relationships from the application of the ABC test described above. Existing law, instead, provides that these exempt relationships are governed by the multifactor test previously adopted in the case of S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. These exemptions include services provided by a licensed manicurist, subject to the manicurist meeting specified conditions. Existing law makes this exemption for licensed manicurists inoperative on January 1, 2022.This bill would delete the January 1, 2022, inoperative date, thereby making licensed manicurists subject to this exemption indefinitely. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 2778 of the Labor Code is amended to read:2778. (a) Section 2775 and the holding in Dynamex do not apply to a contract for professional services as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:(1) The individual maintains a business location, which may include the individuals residence, that is separate from the hiring entity. Nothing in this paragraph prohibits an individual from choosing to perform services at the location of the hiring entity.(2) If work is performed more than six months after the effective date of this section and the work is performed in a jurisdiction that requires the individual to have a business license or business tax registration, the individual has the required business license or business tax registration in order to provide the services under the contract, in addition to any required professional licenses or permits for the individual to practice in their profession.(3) The individual has the ability to set or negotiate their own rates for the services performed.(4) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individuals own hours.(5) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.(6) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.(b) For purposes of this section:(1) An individual includes an individual providing services as a sole proprietor or other business entity.(2) Professional services means services that meet any of the following:(A) Marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the individual or work that is an essential part of or necessarily incident to any of the contracted work.(B) Administrator of human resources, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.(C) Travel agent services provided by either of the following:(i) A person regulated by the Attorney General under Article 2.6 (commencing with Section 17550) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.(ii) An individual who is a seller of travel within the meaning of subdivision (a) of Section 17550.1 of the Business and Professions Code and who is exempt from the registration under subdivision (g) of Section 17550.20 of the Business and Professions Code.(D) Graphic design.(E) Grant writer.(F) (i) Fine artist.(ii) For the purposes of this subparagraph, fine artist means an individual who creates works of art to be appreciated primarily or solely for their imaginative, aesthetic, or intellectual content, including drawings, paintings, sculptures, mosaics, works of calligraphy, works of graphic art, crafts, or mixed media.(G) Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service pursuant to Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations.(H) Payment processing agent through an independent sales organization.(I) Services provided by any of the following:(i) By a still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. This subclause is not applicable to a still photographer, photojournalist, videographer, or photo editor who works on motion pictures, which is inclusive of, but is not limited to, theatrical or commercial productions, broadcast news, television, and music videos. Nothing in this section restricts a still photographer, photojournalist, photo editor, or videographer from distributing, licensing, or selling their work product to another business, except as prohibited under copyright laws or workplace collective bargaining agreements.(ii) To a digital content aggregator by a still photographer, photojournalist, videographer, or photo editor.(iii) For the purposes of this subparagraph the following definitions apply:(I) Photo editor means an individual who performs services ancillary to the creation of digital content, such as retouching, editing, and keywording.(II) Digital content aggregator means a licensing intermediary that obtains a license or assignment of copyright from a still photographer, photojournalist, videographer, or photo editor for the purposes of distributing that copyright by way of sublicense or assignment, to the intermediarys third party end users.(J) Services provided by a freelance writer, translator, editor, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the rate of pay, intellectual property rights, and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(K) Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media, who works under a written contract that specifies the rate of pay, intellectual property rights and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity, the individual does not primarily perform the work at the hiring entitys business location notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(L) Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist provided that the individual:(i) Sets their own rates, processes their own payments, and is paid directly by clients.(ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.(iii) Has their own book of business and schedules their own appointments.(iv) Maintains their own business license for the services offered to clients.(v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.(vi)This subparagraph shall become inoperative, with respect to licensed manicurists, on January 1, 2022.(M) A specialized performer hired by a performing arts company or organization to teach a master class for no more than one week. Master class means a specialized course for limited duration that is not regularly offered by the hiring entity and is taught by an expert in a recognized field of artistic endeavor who does not work for the hiring entity to teach on a regular basis.(N) Services provided by an appraiser, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.(O) Registered professional foresters licensed pursuant to Article 3 (commencing with Section 750) of Chapter 2.5 of Division 1 of the Public Resources Code.(b)(c) Section 2775 and the holding in Dynamex do not apply to the following, which are subject to the Business and Professions Code:(1) A real estate licensee licensed by the State of California pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by subdivision (b) of Section 10032 of the Business and Professions Code. If that section is not applicable, then this determination shall be governed as follows:(A) For purposes of unemployment insurance by Section 650 of the Unemployment Insurance Code.(B) For purposes of workers compensation by Section 3200 et seq.(C) For all other purposes in the Labor Code by Borello. The statutorily imposed duties of a responsible broker under Section 10015.1 of the Business and Professions Code are not factors to be considered under the Borello test.(2) A home inspector, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.(3) A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. |
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| 3 | 3 | | CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 231Introduced by Assembly Member NguyenJanuary 12, 2021 An act to amend Section 2778 of the Labor Code, relating to employment. LEGISLATIVE COUNSEL'S DIGESTAB 231, as introduced, Nguyen. Worker classification: employees and independent contractors: licensed manicurists.Existing law requires a 3-part test, commonly known as the ABC test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entitys business, and the person is customarily engaged in an independently established trade, occupation, or business. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification.Existing law exempts specified occupations and business relationships from the application of the ABC test described above. Existing law, instead, provides that these exempt relationships are governed by the multifactor test previously adopted in the case of S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. These exemptions include services provided by a licensed manicurist, subject to the manicurist meeting specified conditions. Existing law makes this exemption for licensed manicurists inoperative on January 1, 2022.This bill would delete the January 1, 2022, inoperative date, thereby making licensed manicurists subject to this exemption indefinitely. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO |
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| 9 | 9 | | CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION |
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| 11 | 11 | | Assembly Bill |
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| 13 | 13 | | No. 231 |
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| 15 | 15 | | Introduced by Assembly Member NguyenJanuary 12, 2021 |
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| 17 | 17 | | Introduced by Assembly Member Nguyen |
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| 18 | 18 | | January 12, 2021 |
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| 20 | 20 | | An act to amend Section 2778 of the Labor Code, relating to employment. |
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| 22 | 22 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 24 | 24 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 26 | 26 | | AB 231, as introduced, Nguyen. Worker classification: employees and independent contractors: licensed manicurists. |
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| 27 | 27 | | |
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| 28 | 28 | | Existing law requires a 3-part test, commonly known as the ABC test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entitys business, and the person is customarily engaged in an independently established trade, occupation, or business. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification.Existing law exempts specified occupations and business relationships from the application of the ABC test described above. Existing law, instead, provides that these exempt relationships are governed by the multifactor test previously adopted in the case of S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. These exemptions include services provided by a licensed manicurist, subject to the manicurist meeting specified conditions. Existing law makes this exemption for licensed manicurists inoperative on January 1, 2022.This bill would delete the January 1, 2022, inoperative date, thereby making licensed manicurists subject to this exemption indefinitely. |
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| 30 | 30 | | Existing law requires a 3-part test, commonly known as the ABC test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entitys business, and the person is customarily engaged in an independently established trade, occupation, or business. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification. |
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| 32 | 32 | | Existing law exempts specified occupations and business relationships from the application of the ABC test described above. Existing law, instead, provides that these exempt relationships are governed by the multifactor test previously adopted in the case of S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. These exemptions include services provided by a licensed manicurist, subject to the manicurist meeting specified conditions. Existing law makes this exemption for licensed manicurists inoperative on January 1, 2022. |
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| 34 | 34 | | This bill would delete the January 1, 2022, inoperative date, thereby making licensed manicurists subject to this exemption indefinitely. |
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| 35 | 35 | | |
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| 36 | 36 | | ## Digest Key |
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| 38 | 38 | | ## Bill Text |
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| 40 | 40 | | The people of the State of California do enact as follows:SECTION 1. Section 2778 of the Labor Code is amended to read:2778. (a) Section 2775 and the holding in Dynamex do not apply to a contract for professional services as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:(1) The individual maintains a business location, which may include the individuals residence, that is separate from the hiring entity. Nothing in this paragraph prohibits an individual from choosing to perform services at the location of the hiring entity.(2) If work is performed more than six months after the effective date of this section and the work is performed in a jurisdiction that requires the individual to have a business license or business tax registration, the individual has the required business license or business tax registration in order to provide the services under the contract, in addition to any required professional licenses or permits for the individual to practice in their profession.(3) The individual has the ability to set or negotiate their own rates for the services performed.(4) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individuals own hours.(5) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.(6) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.(b) For purposes of this section:(1) An individual includes an individual providing services as a sole proprietor or other business entity.(2) Professional services means services that meet any of the following:(A) Marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the individual or work that is an essential part of or necessarily incident to any of the contracted work.(B) Administrator of human resources, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.(C) Travel agent services provided by either of the following:(i) A person regulated by the Attorney General under Article 2.6 (commencing with Section 17550) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.(ii) An individual who is a seller of travel within the meaning of subdivision (a) of Section 17550.1 of the Business and Professions Code and who is exempt from the registration under subdivision (g) of Section 17550.20 of the Business and Professions Code.(D) Graphic design.(E) Grant writer.(F) (i) Fine artist.(ii) For the purposes of this subparagraph, fine artist means an individual who creates works of art to be appreciated primarily or solely for their imaginative, aesthetic, or intellectual content, including drawings, paintings, sculptures, mosaics, works of calligraphy, works of graphic art, crafts, or mixed media.(G) Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service pursuant to Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations.(H) Payment processing agent through an independent sales organization.(I) Services provided by any of the following:(i) By a still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. This subclause is not applicable to a still photographer, photojournalist, videographer, or photo editor who works on motion pictures, which is inclusive of, but is not limited to, theatrical or commercial productions, broadcast news, television, and music videos. Nothing in this section restricts a still photographer, photojournalist, photo editor, or videographer from distributing, licensing, or selling their work product to another business, except as prohibited under copyright laws or workplace collective bargaining agreements.(ii) To a digital content aggregator by a still photographer, photojournalist, videographer, or photo editor.(iii) For the purposes of this subparagraph the following definitions apply:(I) Photo editor means an individual who performs services ancillary to the creation of digital content, such as retouching, editing, and keywording.(II) Digital content aggregator means a licensing intermediary that obtains a license or assignment of copyright from a still photographer, photojournalist, videographer, or photo editor for the purposes of distributing that copyright by way of sublicense or assignment, to the intermediarys third party end users.(J) Services provided by a freelance writer, translator, editor, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the rate of pay, intellectual property rights, and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(K) Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media, who works under a written contract that specifies the rate of pay, intellectual property rights and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity, the individual does not primarily perform the work at the hiring entitys business location notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(L) Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist provided that the individual:(i) Sets their own rates, processes their own payments, and is paid directly by clients.(ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.(iii) Has their own book of business and schedules their own appointments.(iv) Maintains their own business license for the services offered to clients.(v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.(vi)This subparagraph shall become inoperative, with respect to licensed manicurists, on January 1, 2022.(M) A specialized performer hired by a performing arts company or organization to teach a master class for no more than one week. Master class means a specialized course for limited duration that is not regularly offered by the hiring entity and is taught by an expert in a recognized field of artistic endeavor who does not work for the hiring entity to teach on a regular basis.(N) Services provided by an appraiser, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.(O) Registered professional foresters licensed pursuant to Article 3 (commencing with Section 750) of Chapter 2.5 of Division 1 of the Public Resources Code.(b)(c) Section 2775 and the holding in Dynamex do not apply to the following, which are subject to the Business and Professions Code:(1) A real estate licensee licensed by the State of California pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by subdivision (b) of Section 10032 of the Business and Professions Code. If that section is not applicable, then this determination shall be governed as follows:(A) For purposes of unemployment insurance by Section 650 of the Unemployment Insurance Code.(B) For purposes of workers compensation by Section 3200 et seq.(C) For all other purposes in the Labor Code by Borello. The statutorily imposed duties of a responsible broker under Section 10015.1 of the Business and Professions Code are not factors to be considered under the Borello test.(2) A home inspector, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.(3) A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. |
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| 42 | 42 | | The people of the State of California do enact as follows: |
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| 44 | 44 | | ## The people of the State of California do enact as follows: |
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| 46 | 46 | | SECTION 1. Section 2778 of the Labor Code is amended to read:2778. (a) Section 2775 and the holding in Dynamex do not apply to a contract for professional services as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:(1) The individual maintains a business location, which may include the individuals residence, that is separate from the hiring entity. Nothing in this paragraph prohibits an individual from choosing to perform services at the location of the hiring entity.(2) If work is performed more than six months after the effective date of this section and the work is performed in a jurisdiction that requires the individual to have a business license or business tax registration, the individual has the required business license or business tax registration in order to provide the services under the contract, in addition to any required professional licenses or permits for the individual to practice in their profession.(3) The individual has the ability to set or negotiate their own rates for the services performed.(4) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individuals own hours.(5) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.(6) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.(b) For purposes of this section:(1) An individual includes an individual providing services as a sole proprietor or other business entity.(2) Professional services means services that meet any of the following:(A) Marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the individual or work that is an essential part of or necessarily incident to any of the contracted work.(B) Administrator of human resources, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.(C) Travel agent services provided by either of the following:(i) A person regulated by the Attorney General under Article 2.6 (commencing with Section 17550) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.(ii) An individual who is a seller of travel within the meaning of subdivision (a) of Section 17550.1 of the Business and Professions Code and who is exempt from the registration under subdivision (g) of Section 17550.20 of the Business and Professions Code.(D) Graphic design.(E) Grant writer.(F) (i) Fine artist.(ii) For the purposes of this subparagraph, fine artist means an individual who creates works of art to be appreciated primarily or solely for their imaginative, aesthetic, or intellectual content, including drawings, paintings, sculptures, mosaics, works of calligraphy, works of graphic art, crafts, or mixed media.(G) Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service pursuant to Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations.(H) Payment processing agent through an independent sales organization.(I) Services provided by any of the following:(i) By a still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. This subclause is not applicable to a still photographer, photojournalist, videographer, or photo editor who works on motion pictures, which is inclusive of, but is not limited to, theatrical or commercial productions, broadcast news, television, and music videos. Nothing in this section restricts a still photographer, photojournalist, photo editor, or videographer from distributing, licensing, or selling their work product to another business, except as prohibited under copyright laws or workplace collective bargaining agreements.(ii) To a digital content aggregator by a still photographer, photojournalist, videographer, or photo editor.(iii) For the purposes of this subparagraph the following definitions apply:(I) Photo editor means an individual who performs services ancillary to the creation of digital content, such as retouching, editing, and keywording.(II) Digital content aggregator means a licensing intermediary that obtains a license or assignment of copyright from a still photographer, photojournalist, videographer, or photo editor for the purposes of distributing that copyright by way of sublicense or assignment, to the intermediarys third party end users.(J) Services provided by a freelance writer, translator, editor, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the rate of pay, intellectual property rights, and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(K) Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media, who works under a written contract that specifies the rate of pay, intellectual property rights and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity, the individual does not primarily perform the work at the hiring entitys business location notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(L) Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist provided that the individual:(i) Sets their own rates, processes their own payments, and is paid directly by clients.(ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.(iii) Has their own book of business and schedules their own appointments.(iv) Maintains their own business license for the services offered to clients.(v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.(vi)This subparagraph shall become inoperative, with respect to licensed manicurists, on January 1, 2022.(M) A specialized performer hired by a performing arts company or organization to teach a master class for no more than one week. Master class means a specialized course for limited duration that is not regularly offered by the hiring entity and is taught by an expert in a recognized field of artistic endeavor who does not work for the hiring entity to teach on a regular basis.(N) Services provided by an appraiser, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.(O) Registered professional foresters licensed pursuant to Article 3 (commencing with Section 750) of Chapter 2.5 of Division 1 of the Public Resources Code.(b)(c) Section 2775 and the holding in Dynamex do not apply to the following, which are subject to the Business and Professions Code:(1) A real estate licensee licensed by the State of California pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by subdivision (b) of Section 10032 of the Business and Professions Code. If that section is not applicable, then this determination shall be governed as follows:(A) For purposes of unemployment insurance by Section 650 of the Unemployment Insurance Code.(B) For purposes of workers compensation by Section 3200 et seq.(C) For all other purposes in the Labor Code by Borello. The statutorily imposed duties of a responsible broker under Section 10015.1 of the Business and Professions Code are not factors to be considered under the Borello test.(2) A home inspector, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.(3) A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. |
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| 48 | 48 | | SECTION 1. Section 2778 of the Labor Code is amended to read: |
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| 50 | 50 | | ### SECTION 1. |
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| 52 | 52 | | 2778. (a) Section 2775 and the holding in Dynamex do not apply to a contract for professional services as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:(1) The individual maintains a business location, which may include the individuals residence, that is separate from the hiring entity. Nothing in this paragraph prohibits an individual from choosing to perform services at the location of the hiring entity.(2) If work is performed more than six months after the effective date of this section and the work is performed in a jurisdiction that requires the individual to have a business license or business tax registration, the individual has the required business license or business tax registration in order to provide the services under the contract, in addition to any required professional licenses or permits for the individual to practice in their profession.(3) The individual has the ability to set or negotiate their own rates for the services performed.(4) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individuals own hours.(5) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.(6) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.(b) For purposes of this section:(1) An individual includes an individual providing services as a sole proprietor or other business entity.(2) Professional services means services that meet any of the following:(A) Marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the individual or work that is an essential part of or necessarily incident to any of the contracted work.(B) Administrator of human resources, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.(C) Travel agent services provided by either of the following:(i) A person regulated by the Attorney General under Article 2.6 (commencing with Section 17550) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.(ii) An individual who is a seller of travel within the meaning of subdivision (a) of Section 17550.1 of the Business and Professions Code and who is exempt from the registration under subdivision (g) of Section 17550.20 of the Business and Professions Code.(D) Graphic design.(E) Grant writer.(F) (i) Fine artist.(ii) For the purposes of this subparagraph, fine artist means an individual who creates works of art to be appreciated primarily or solely for their imaginative, aesthetic, or intellectual content, including drawings, paintings, sculptures, mosaics, works of calligraphy, works of graphic art, crafts, or mixed media.(G) Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service pursuant to Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations.(H) Payment processing agent through an independent sales organization.(I) Services provided by any of the following:(i) By a still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. This subclause is not applicable to a still photographer, photojournalist, videographer, or photo editor who works on motion pictures, which is inclusive of, but is not limited to, theatrical or commercial productions, broadcast news, television, and music videos. Nothing in this section restricts a still photographer, photojournalist, photo editor, or videographer from distributing, licensing, or selling their work product to another business, except as prohibited under copyright laws or workplace collective bargaining agreements.(ii) To a digital content aggregator by a still photographer, photojournalist, videographer, or photo editor.(iii) For the purposes of this subparagraph the following definitions apply:(I) Photo editor means an individual who performs services ancillary to the creation of digital content, such as retouching, editing, and keywording.(II) Digital content aggregator means a licensing intermediary that obtains a license or assignment of copyright from a still photographer, photojournalist, videographer, or photo editor for the purposes of distributing that copyright by way of sublicense or assignment, to the intermediarys third party end users.(J) Services provided by a freelance writer, translator, editor, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the rate of pay, intellectual property rights, and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(K) Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media, who works under a written contract that specifies the rate of pay, intellectual property rights and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity, the individual does not primarily perform the work at the hiring entitys business location notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(L) Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist provided that the individual:(i) Sets their own rates, processes their own payments, and is paid directly by clients.(ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.(iii) Has their own book of business and schedules their own appointments.(iv) Maintains their own business license for the services offered to clients.(v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.(vi)This subparagraph shall become inoperative, with respect to licensed manicurists, on January 1, 2022.(M) A specialized performer hired by a performing arts company or organization to teach a master class for no more than one week. Master class means a specialized course for limited duration that is not regularly offered by the hiring entity and is taught by an expert in a recognized field of artistic endeavor who does not work for the hiring entity to teach on a regular basis.(N) Services provided by an appraiser, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.(O) Registered professional foresters licensed pursuant to Article 3 (commencing with Section 750) of Chapter 2.5 of Division 1 of the Public Resources Code.(b)(c) Section 2775 and the holding in Dynamex do not apply to the following, which are subject to the Business and Professions Code:(1) A real estate licensee licensed by the State of California pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by subdivision (b) of Section 10032 of the Business and Professions Code. If that section is not applicable, then this determination shall be governed as follows:(A) For purposes of unemployment insurance by Section 650 of the Unemployment Insurance Code.(B) For purposes of workers compensation by Section 3200 et seq.(C) For all other purposes in the Labor Code by Borello. The statutorily imposed duties of a responsible broker under Section 10015.1 of the Business and Professions Code are not factors to be considered under the Borello test.(2) A home inspector, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.(3) A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. |
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| 53 | 53 | | |
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| 54 | 54 | | 2778. (a) Section 2775 and the holding in Dynamex do not apply to a contract for professional services as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:(1) The individual maintains a business location, which may include the individuals residence, that is separate from the hiring entity. Nothing in this paragraph prohibits an individual from choosing to perform services at the location of the hiring entity.(2) If work is performed more than six months after the effective date of this section and the work is performed in a jurisdiction that requires the individual to have a business license or business tax registration, the individual has the required business license or business tax registration in order to provide the services under the contract, in addition to any required professional licenses or permits for the individual to practice in their profession.(3) The individual has the ability to set or negotiate their own rates for the services performed.(4) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individuals own hours.(5) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.(6) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.(b) For purposes of this section:(1) An individual includes an individual providing services as a sole proprietor or other business entity.(2) Professional services means services that meet any of the following:(A) Marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the individual or work that is an essential part of or necessarily incident to any of the contracted work.(B) Administrator of human resources, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.(C) Travel agent services provided by either of the following:(i) A person regulated by the Attorney General under Article 2.6 (commencing with Section 17550) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.(ii) An individual who is a seller of travel within the meaning of subdivision (a) of Section 17550.1 of the Business and Professions Code and who is exempt from the registration under subdivision (g) of Section 17550.20 of the Business and Professions Code.(D) Graphic design.(E) Grant writer.(F) (i) Fine artist.(ii) For the purposes of this subparagraph, fine artist means an individual who creates works of art to be appreciated primarily or solely for their imaginative, aesthetic, or intellectual content, including drawings, paintings, sculptures, mosaics, works of calligraphy, works of graphic art, crafts, or mixed media.(G) Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service pursuant to Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations.(H) Payment processing agent through an independent sales organization.(I) Services provided by any of the following:(i) By a still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. This subclause is not applicable to a still photographer, photojournalist, videographer, or photo editor who works on motion pictures, which is inclusive of, but is not limited to, theatrical or commercial productions, broadcast news, television, and music videos. Nothing in this section restricts a still photographer, photojournalist, photo editor, or videographer from distributing, licensing, or selling their work product to another business, except as prohibited under copyright laws or workplace collective bargaining agreements.(ii) To a digital content aggregator by a still photographer, photojournalist, videographer, or photo editor.(iii) For the purposes of this subparagraph the following definitions apply:(I) Photo editor means an individual who performs services ancillary to the creation of digital content, such as retouching, editing, and keywording.(II) Digital content aggregator means a licensing intermediary that obtains a license or assignment of copyright from a still photographer, photojournalist, videographer, or photo editor for the purposes of distributing that copyright by way of sublicense or assignment, to the intermediarys third party end users.(J) Services provided by a freelance writer, translator, editor, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the rate of pay, intellectual property rights, and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(K) Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media, who works under a written contract that specifies the rate of pay, intellectual property rights and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity, the individual does not primarily perform the work at the hiring entitys business location notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(L) Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist provided that the individual:(i) Sets their own rates, processes their own payments, and is paid directly by clients.(ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.(iii) Has their own book of business and schedules their own appointments.(iv) Maintains their own business license for the services offered to clients.(v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.(vi)This subparagraph shall become inoperative, with respect to licensed manicurists, on January 1, 2022.(M) A specialized performer hired by a performing arts company or organization to teach a master class for no more than one week. Master class means a specialized course for limited duration that is not regularly offered by the hiring entity and is taught by an expert in a recognized field of artistic endeavor who does not work for the hiring entity to teach on a regular basis.(N) Services provided by an appraiser, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.(O) Registered professional foresters licensed pursuant to Article 3 (commencing with Section 750) of Chapter 2.5 of Division 1 of the Public Resources Code.(b)(c) Section 2775 and the holding in Dynamex do not apply to the following, which are subject to the Business and Professions Code:(1) A real estate licensee licensed by the State of California pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by subdivision (b) of Section 10032 of the Business and Professions Code. If that section is not applicable, then this determination shall be governed as follows:(A) For purposes of unemployment insurance by Section 650 of the Unemployment Insurance Code.(B) For purposes of workers compensation by Section 3200 et seq.(C) For all other purposes in the Labor Code by Borello. The statutorily imposed duties of a responsible broker under Section 10015.1 of the Business and Professions Code are not factors to be considered under the Borello test.(2) A home inspector, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.(3) A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. |
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| 55 | 55 | | |
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| 56 | 56 | | 2778. (a) Section 2775 and the holding in Dynamex do not apply to a contract for professional services as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:(1) The individual maintains a business location, which may include the individuals residence, that is separate from the hiring entity. Nothing in this paragraph prohibits an individual from choosing to perform services at the location of the hiring entity.(2) If work is performed more than six months after the effective date of this section and the work is performed in a jurisdiction that requires the individual to have a business license or business tax registration, the individual has the required business license or business tax registration in order to provide the services under the contract, in addition to any required professional licenses or permits for the individual to practice in their profession.(3) The individual has the ability to set or negotiate their own rates for the services performed.(4) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individuals own hours.(5) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.(6) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.(b) For purposes of this section:(1) An individual includes an individual providing services as a sole proprietor or other business entity.(2) Professional services means services that meet any of the following:(A) Marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the individual or work that is an essential part of or necessarily incident to any of the contracted work.(B) Administrator of human resources, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.(C) Travel agent services provided by either of the following:(i) A person regulated by the Attorney General under Article 2.6 (commencing with Section 17550) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.(ii) An individual who is a seller of travel within the meaning of subdivision (a) of Section 17550.1 of the Business and Professions Code and who is exempt from the registration under subdivision (g) of Section 17550.20 of the Business and Professions Code.(D) Graphic design.(E) Grant writer.(F) (i) Fine artist.(ii) For the purposes of this subparagraph, fine artist means an individual who creates works of art to be appreciated primarily or solely for their imaginative, aesthetic, or intellectual content, including drawings, paintings, sculptures, mosaics, works of calligraphy, works of graphic art, crafts, or mixed media.(G) Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service pursuant to Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations.(H) Payment processing agent through an independent sales organization.(I) Services provided by any of the following:(i) By a still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. This subclause is not applicable to a still photographer, photojournalist, videographer, or photo editor who works on motion pictures, which is inclusive of, but is not limited to, theatrical or commercial productions, broadcast news, television, and music videos. Nothing in this section restricts a still photographer, photojournalist, photo editor, or videographer from distributing, licensing, or selling their work product to another business, except as prohibited under copyright laws or workplace collective bargaining agreements.(ii) To a digital content aggregator by a still photographer, photojournalist, videographer, or photo editor.(iii) For the purposes of this subparagraph the following definitions apply:(I) Photo editor means an individual who performs services ancillary to the creation of digital content, such as retouching, editing, and keywording.(II) Digital content aggregator means a licensing intermediary that obtains a license or assignment of copyright from a still photographer, photojournalist, videographer, or photo editor for the purposes of distributing that copyright by way of sublicense or assignment, to the intermediarys third party end users.(J) Services provided by a freelance writer, translator, editor, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the rate of pay, intellectual property rights, and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(K) Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media, who works under a written contract that specifies the rate of pay, intellectual property rights and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity, the individual does not primarily perform the work at the hiring entitys business location notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity.(L) Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist provided that the individual:(i) Sets their own rates, processes their own payments, and is paid directly by clients.(ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.(iii) Has their own book of business and schedules their own appointments.(iv) Maintains their own business license for the services offered to clients.(v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.(vi)This subparagraph shall become inoperative, with respect to licensed manicurists, on January 1, 2022.(M) A specialized performer hired by a performing arts company or organization to teach a master class for no more than one week. Master class means a specialized course for limited duration that is not regularly offered by the hiring entity and is taught by an expert in a recognized field of artistic endeavor who does not work for the hiring entity to teach on a regular basis.(N) Services provided by an appraiser, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.(O) Registered professional foresters licensed pursuant to Article 3 (commencing with Section 750) of Chapter 2.5 of Division 1 of the Public Resources Code.(b)(c) Section 2775 and the holding in Dynamex do not apply to the following, which are subject to the Business and Professions Code:(1) A real estate licensee licensed by the State of California pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by subdivision (b) of Section 10032 of the Business and Professions Code. If that section is not applicable, then this determination shall be governed as follows:(A) For purposes of unemployment insurance by Section 650 of the Unemployment Insurance Code.(B) For purposes of workers compensation by Section 3200 et seq.(C) For all other purposes in the Labor Code by Borello. The statutorily imposed duties of a responsible broker under Section 10015.1 of the Business and Professions Code are not factors to be considered under the Borello test.(2) A home inspector, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.(3) A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. |
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| 57 | 57 | | |
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| 58 | 58 | | |
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| 59 | 59 | | |
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| 60 | 60 | | 2778. (a) Section 2775 and the holding in Dynamex do not apply to a contract for professional services as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied: |
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| 61 | 61 | | |
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| 62 | 62 | | (1) The individual maintains a business location, which may include the individuals residence, that is separate from the hiring entity. Nothing in this paragraph prohibits an individual from choosing to perform services at the location of the hiring entity. |
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| 63 | 63 | | |
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| 64 | 64 | | (2) If work is performed more than six months after the effective date of this section and the work is performed in a jurisdiction that requires the individual to have a business license or business tax registration, the individual has the required business license or business tax registration in order to provide the services under the contract, in addition to any required professional licenses or permits for the individual to practice in their profession. |
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| 65 | 65 | | |
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| 66 | 66 | | (3) The individual has the ability to set or negotiate their own rates for the services performed. |
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| 67 | 67 | | |
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| 68 | 68 | | (4) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individuals own hours. |
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| 69 | 69 | | |
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| 70 | 70 | | (5) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work. |
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| 71 | 71 | | |
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| 72 | 72 | | (6) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services. |
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| 73 | 73 | | |
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| 74 | 74 | | (b) For purposes of this section: |
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| 75 | 75 | | |
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| 76 | 76 | | (1) An individual includes an individual providing services as a sole proprietor or other business entity. |
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| 77 | 77 | | |
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| 78 | 78 | | (2) Professional services means services that meet any of the following: |
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| 79 | 79 | | |
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| 80 | 80 | | (A) Marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the individual or work that is an essential part of or necessarily incident to any of the contracted work. |
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| 81 | 81 | | |
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| 82 | 82 | | (B) Administrator of human resources, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time. |
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| 83 | 83 | | |
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| 84 | 84 | | (C) Travel agent services provided by either of the following: |
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| 85 | 85 | | |
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| 86 | 86 | | (i) A person regulated by the Attorney General under Article 2.6 (commencing with Section 17550) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code. |
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| 87 | 87 | | |
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| 88 | 88 | | (ii) An individual who is a seller of travel within the meaning of subdivision (a) of Section 17550.1 of the Business and Professions Code and who is exempt from the registration under subdivision (g) of Section 17550.20 of the Business and Professions Code. |
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| 89 | 89 | | |
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| 90 | 90 | | (D) Graphic design. |
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| 91 | 91 | | |
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| 92 | 92 | | (E) Grant writer. |
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| 93 | 93 | | |
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| 94 | 94 | | (F) (i) Fine artist. |
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| 95 | 95 | | |
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| 96 | 96 | | (ii) For the purposes of this subparagraph, fine artist means an individual who creates works of art to be appreciated primarily or solely for their imaginative, aesthetic, or intellectual content, including drawings, paintings, sculptures, mosaics, works of calligraphy, works of graphic art, crafts, or mixed media. |
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| 97 | 97 | | |
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| 98 | 98 | | (G) Services provided by an enrolled agent who is licensed by the United States Department of the Treasury to practice before the Internal Revenue Service pursuant to Part 10 of Subtitle A of Title 31 of the Code of Federal Regulations. |
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| 99 | 99 | | |
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| 100 | 100 | | (H) Payment processing agent through an independent sales organization. |
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| 101 | 101 | | |
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| 102 | 102 | | (I) Services provided by any of the following: |
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| 103 | 103 | | |
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| 104 | 104 | | (i) By a still photographer, photojournalist, videographer, or photo editor who works under a written contract that specifies the rate of pay and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. This subclause is not applicable to a still photographer, photojournalist, videographer, or photo editor who works on motion pictures, which is inclusive of, but is not limited to, theatrical or commercial productions, broadcast news, television, and music videos. Nothing in this section restricts a still photographer, photojournalist, photo editor, or videographer from distributing, licensing, or selling their work product to another business, except as prohibited under copyright laws or workplace collective bargaining agreements. |
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| 105 | 105 | | |
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| 106 | 106 | | (ii) To a digital content aggregator by a still photographer, photojournalist, videographer, or photo editor. |
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| 107 | 107 | | |
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| 108 | 108 | | (iii) For the purposes of this subparagraph the following definitions apply: |
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| 109 | 109 | | |
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| 110 | 110 | | (I) Photo editor means an individual who performs services ancillary to the creation of digital content, such as retouching, editing, and keywording. |
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| 111 | 111 | | |
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| 112 | 112 | | (II) Digital content aggregator means a licensing intermediary that obtains a license or assignment of copyright from a still photographer, photojournalist, videographer, or photo editor for the purposes of distributing that copyright by way of sublicense or assignment, to the intermediarys third party end users. |
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| 113 | 113 | | |
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| 114 | 114 | | (J) Services provided by a freelance writer, translator, editor, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the rate of pay, intellectual property rights, and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity; the individual does not primarily perform the work at the hiring entitys business location, notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. |
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| 115 | 115 | | |
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| 116 | 116 | | (K) Services provided by an individual as a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media, who works under a written contract that specifies the rate of pay, intellectual property rights and obligation to pay by a defined time, as long as the individual providing the services is not directly replacing an employee who performed the same work at the same volume for the hiring entity, the individual does not primarily perform the work at the hiring entitys business location notwithstanding paragraph (1) of subdivision (a); and the individual is not restricted from working for more than one hiring entity. |
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| 117 | 117 | | |
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| 118 | 118 | | (L) Services provided by a licensed esthetician, licensed electrologist, licensed manicurist, licensed barber, or licensed cosmetologist provided that the individual: |
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| 119 | 119 | | |
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| 120 | 120 | | (i) Sets their own rates, processes their own payments, and is paid directly by clients. |
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| 121 | 121 | | |
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| 122 | 122 | | (ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services. |
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| 123 | 123 | | |
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| 124 | 124 | | (iii) Has their own book of business and schedules their own appointments. |
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| 125 | 125 | | |
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| 126 | 126 | | (iv) Maintains their own business license for the services offered to clients. |
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| 127 | 127 | | |
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| 128 | 128 | | (v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space. |
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| 129 | 129 | | |
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| 130 | 130 | | (vi)This subparagraph shall become inoperative, with respect to licensed manicurists, on January 1, 2022. |
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| 131 | 131 | | |
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| 132 | 132 | | |
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| 133 | 133 | | |
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| 134 | 134 | | (M) A specialized performer hired by a performing arts company or organization to teach a master class for no more than one week. Master class means a specialized course for limited duration that is not regularly offered by the hiring entity and is taught by an expert in a recognized field of artistic endeavor who does not work for the hiring entity to teach on a regular basis. |
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| 135 | 135 | | |
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| 136 | 136 | | (N) Services provided by an appraiser, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code. |
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| 137 | 137 | | |
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| 138 | 138 | | (O) Registered professional foresters licensed pursuant to Article 3 (commencing with Section 750) of Chapter 2.5 of Division 1 of the Public Resources Code. |
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| 139 | 139 | | |
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| 140 | 140 | | (b) |
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| 141 | 141 | | |
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| 142 | 142 | | |
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| 143 | 143 | | |
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| 144 | 144 | | (c) Section 2775 and the holding in Dynamex do not apply to the following, which are subject to the Business and Professions Code: |
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| 145 | 145 | | |
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| 146 | 146 | | (1) A real estate licensee licensed by the State of California pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by subdivision (b) of Section 10032 of the Business and Professions Code. If that section is not applicable, then this determination shall be governed as follows: |
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| 147 | 147 | | |
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| 148 | 148 | | (A) For purposes of unemployment insurance by Section 650 of the Unemployment Insurance Code. |
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| 149 | 149 | | |
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| 150 | 150 | | (B) For purposes of workers compensation by Section 3200 et seq. |
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| 151 | 151 | | |
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| 152 | 152 | | (C) For all other purposes in the Labor Code by Borello. The statutorily imposed duties of a responsible broker under Section 10015.1 of the Business and Professions Code are not factors to be considered under the Borello test. |
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| 153 | 153 | | |
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| 154 | 154 | | (2) A home inspector, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code. |
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| 155 | 155 | | |
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| 156 | 156 | | (3) A repossession agency licensed pursuant to Section 7500.2 of the Business and Professions Code, for whom the determination of employee or independent contractor status shall be governed by Section 7500.2 of the Business and Professions Code, if the repossession agency is free from the control and direction of the hiring person or entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. |
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