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California Assembly approves bill to codify stricter test for independent contractor misclassification

May 30, 2019

California’s state Assembly approved Assembly Bill 5 which codifies a recent court decision to use the more-strict ABC test for determining independent contractor status; the decision is also known as the “Dynamex decision.” The bill, which drew concerns from gig economy firms, will now go to the state Senate.

The Associated Press reported human cloud, ride-sharing platform firm Lyft reiterated its opposition to the bill and released a statement that “Lyft drivers overwhelmingly prefer the freedom of working where, when and how much they want.”

Assembly members voted 55 to 11 in favor of the bill.

“Big businesses shouldn’t be able to pass their costs onto taxpayers while depriving workers of the labor law protections they are rightfully entitled to,” bill sponsor Assemblywoman Lorena Gonzalez, D-San Diego, said in a statement after the vote.  

The California Chamber of Commerce in a letter said it could support the bill but called for more exemptions to the rule. It also raised concerns about the ABC test being able to be applied retroactively. The chamber letter said it agreed with exemptions already in the bill for insurance agents, doctors, realtors, hair stylists, direct sellers and others.

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