If you are an employer anywhere in the state of California, then you have undoubtedly heard of Assembly Bill 5 (AB 5). This new law, which goes into effect on January 1, 2020, redefines how employers are allowed to classify workers. If you have made use of independent contractors or freelancers, you may now have to let them go or convert them to regular employees. At Sacks Law Group, APC, our Los Angeles workers’ compensation defense lawyers want to help you understand your responsibilities during this transition.
What this bill means for you
Assembly Bill 5 is not even law yet, and it is facing challenges in court. California truckers say that the new law would threaten their livelihood, particularly those who are independent contractors and wish to remain that way. However, AB 5 redefines how employers are allowed to classify workers. Specifically, the law puts the burden of proof on the employer to show that a worker should be classified as an independent contractor, which only happens when all three of these conditions are met:
- the worker is free from the control and direction of the employer concerning how they complete their work
- the worker performs tasks that are outside the usual course of the hiring employer’s business
- the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed hiring employer
For many employers in the state, nothing will change. They have been using independent contractors in a way that is correct under AB 5. However, many industries, such as commercial trucking and ridesharing services, may have to make major changes.
If you are looking at that list and realize that you will no longer be able to classify some of your workers as contractors, you may have to change them over to official employees. This means that you need to provide them with appropriate workers’ compensation benefits.
If you do not provide workers’ compensation insurance to employees, you could face serious consequences. This includes the possibility of criminal charges and major fines. You will also be on the line for any damages if an injured worker decides to file a personal injury lawsuit against you.
We are here to help you through any issues
If you are an employer in California, the most important thing you can do is stay in line with the law. That is easier said than done. As AB 5 is showing us, the laws are constantly in flux. Keeping up with what is required of you can seem impossible. At Sacks Law Group, APC, we are here to help if you have been accused of not providing employees with workers’ compensation insurance. We will work to determine the scope of the charges against you and work to get them reduced or dismissed. Let our Los Angeles workers’ compensation defense attorneys help you today. You can contact us for a consultation of your case by clicking here or calling 310-216-7778.
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