On September 18, 2019, Governor Gavin Newsom signed into law Assembly Bill 5, essentially classifying all workers as employees instead of contractors.
However, certain professions are exempt from this ruling and these professions include doctors, dentists, psychologists, insurance agents, stockbrokers, lawyers, engineers, and real estate agents.
This amended bill was in response to the landmark 2018 ruling in which the Supreme Court of California ruled in Dynamex Operations West Inc. vs. Superior Court of Los Angeles to set strict requirements for employee classification. The three-part test also known as the “ABC” test determined whether an employee could be classified as an independent contractor instead of as an employee. The 2018 ruling replaced a previous 11-point “Borello” test, set in 1989.
If you are a doctor, dentist, or psychologist, then you must continue to use the “Borello” test that was previously in effect to determine if your workers are employees or independent contractors in California.
Additionally, if you have questions or concerns regarding this bill and employee classifications, please contact our office.