Reclassifying Independent Contractors as Employees: An Update on California’s AB5

In this episode of Coffee with Carl, attorney Carl Zoellner covers a big-picture overview of California’s recent legislation reclassifying independent contractors as employees, AB5.

California’s AB5 is a piece of recently-passed legislation that reclassifies many “gig workers” for companies such as Lyft, DoorDash, and Uber. Instead of being treated as independent contractors, AB5 classifies these workers as employees, entitling them to additional benefits and protections.

Several updates and exemptions to this have been released since AB5 was passed. The most recent update was announced on September 4, 2020, and added a long list of exemptions for different types of jobs. Notable, however, is that “gig economy” workers for companies such as Uber, Lyft, and DoorDash are not exempt.

Proposition 22 is a piece of current legislation that attempts to broaden what workers are exempt from AB5, including “gig economy” drivers. It has not yet passed and may not pass at all, so this is one of those wait-and-see situations.

I know that a significant number of our clients have encountered AB5 issues with their businesses, so that’s part of why I want to address it. This is a developing situation, and for now, this has just been a brief update. We’re closely watching the AB5 situation in California and will continue to.

If you’d like to discuss your business and investing needs — whether California-specific or not — I encourage you to take advantage of a free consultation today. On the call, you and a Senior Advisor will discuss the best custom entity structure for your individual situation and goals. You can schedule online or by calling 888.871.8535.

 

Watch as Carl provides an update on California’s recent AB5 legislation, which reclassifies many independent contractors as employees.

 

Resources mentioned in this video:

 

Got an idea for a future Coffee with Carl? Send it to Carl at cwc@andersonadvisors.com.

 

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