Two recent court decisions are helping to quell the effects of the recently-passed Assembly Bill AB 5 (Gonzales, Chaptered September 18, 2019) in regard to California trucking companies, by determining that federal law preempts the most problematic part of both AB 5 and the 2018 California Supreme Court decision Dynamex West Operation v. California Superior Court. Both Dynamex and AB 5 worked to institute the new California worker classification test, the ABC Test, which provides for the following:
Following the California Supreme Court decision in Dynamex Operations v. Superior Court, 4 Cal. 5th 903 (2018), which identified the "ABC Test" for worker classification for the purposes of California's wage and hour determinations under the IWC Wage Orders, and now with the passage and signing into law of Assembly Bill 5 (Gonzales) (2019 Cal ALS 296, 2018 Cal AB 5, 2019 Cal Stats. ch. 296.), which extended the Dynamex ABC Test to apply in workers' compensation insurance and EDD payroll tax determinations of status, we have been inundated with questions and issues arising out of these significant changes to California worker classification law. I have also noticed that California businesses and some experienced California practitioners are misinformed, or simply mistaken, about some elements of AB 5 and its potential effects on California businesses, independent contractors, and employees.