Important legislation you need to be aware of...
AB5 (Gonzalez D) Worker status: employees and independent contractors.
Existing law, as established in the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission. Existing law requires a 3-part test, commonly known as the "ABC" test, to establish that a worker is an independent contractor for those purposes.This bill would state the intent of the Legislature to codify the decision in the Dynamex case and clarify its application.
HOW THIS RELATES TO PARKS AND RECREATION, from our partners at the California Special Districts Association:
While the Dynamex decision is concerning, it largely does not apply to public agencies. The Dynamex decision applies to employers subject to certain "wage orders" in the Labor Code. Those wage orders largely do not apply to public agencies with a few exceptions: employees paid less than minimum wage, commercial drivers, and those employees that work in household or agricultural occupations. However, while Dynamex largely doesn't apply, public agencies should be reviewing their classifications of independent contracts to see how they might compare to the ABC test established by the case and consider reclassifying their employees to avoid any potential for future litigation that might lead to the application of the Dynamex case specifically to public agencies.
As far as AB 5 goes, this bill is looking to codify the Dynamex decision in the Labor Code. The vast majority of provisions of the labor code do not apply to public agencies unless the provisions specifically state that they do. AB 5 does not specifically state that the provisions apply to public agencies. However, as already mentioned there are a few exceptions related to the wage orders for employees paid less than minimum wage, commercial drivers, and those employees that work in household or agricultural occupations. We are concerned however with the intent section of the bill that implies a future intent to apply the Dynamex ABC test to the laws governing workers' compensation, which does apply to public agencies.
For reference the ABC test is:
(a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; and
(b) that the worker performs work that is outside the usual course of the hiring entity's business; and
(c) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
CPRS and CSDA highly recommend you work with your own legal teams, who know the particulars of your agency and your contracting practices to further determine how this may affect your services.
If you have any questions, concerns or comments, feel free to contact any one of us: