Gov. Gavin Newsom signed Assembly Bill 5 into law recently. As part of a signing message, Newsom said that the new regulation would help reduce instances of worker misclassification as independent contractors, “which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits.” The new law goes into effect Jan. 1, 2020.
California employers will be required to use a strict method, called the ABC test, to determine if a worker is either an independent contractor or an employee entitled to the protections and benefits that go along with that status, therefore likely limiting the use of independent contractors in the state’s construction industry.
There are exceptions, however, for certain professions such as engineers and architects.