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Managing the Modern Workplace
V&E International Labor & Employment Resources

So Long Side-Hustle? – California Aims to Reshape “Gig Economy” With Bill AB 5

Last Wednesday, the California legislature passed bill AB 5, a sweeping measure sure to impact the “gig economy” and any business that likens itself the “Uber of _____.”  If signed into law (and the governor has already signaled his intention to sign it), AB 5 would require many companies to re-classify as “employees” many workers who are currently classified as independent contractors, so long as they satisfy certain criteria. AB 5 could force drastic changes to many companies’ business models, requiring them to abide by state minimum wage laws, and to pay payroll taxes, premiums for workers’ compensation, Social Security, unemployment, and disability insurance for their employees’ benefit. Companies impacted would also need to provide their workers the ability to collectively organize under the protections of federal labor laws. 

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  • 21
  • June
  • 2018


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Don’t Be an Ostrich When Dealing with Your Subcontractors

A few weeks ago I spoke about the legal challenges of managing contractors at the Texas Chemical Council’s annual Environmental, Health & Safety conference in Galveston, Texas. While it is “black letter law” that employers are not liable for injuries to employees of subcontractors that they do not control, general contractors in reality are often sued by the employees of their subcontractors after being barred from suing their own employers by workers’ compensation statutes.

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Moving to Texas — Signed, the California Gig Economy

In Dynamex Operations West, Inc. v. Superior Court of Los Angeles County, the California Supreme Court joined a handful of other states, including Massachusetts, in adopting the “ABC test” to determine whether a worker is an employee or an independent contractor. The reach of Dynamex is currently cabined to state wage orders, which regulate certain terms of employment, such as state minimum wage, overtime, and meal and rest breaks. The ABC test is a stark departure from the common-law test focused primarily on the degree of control a hiring entity exercised, or had the right to exercise, over an individual — which is the test that still applies, for now, to claims arising under the California Labor Code and other statutes. Recall our earlier post on the Grubhub decision, in which we outlined various factors companies might consider under the common-law test when classifying workers as independent contractors or employees.

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Thomas H. Wilson

Thomas H. Wilson Partner

Christopher V. Bacon

Christopher V. Bacon Counsel

Sean Becker

Sean Becker Partner

Stephen M. Jacobson

Stephen M. Jacobson Partner

Martin C. Luff

Martin Luff Counsel

Lawrence S. Elbaum Partner