Melendez Introduces Bill to Protect Independent Contractors in California

Press Release

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Sacramento, Calif. – Assemblywoman Melissa Melendez (R-Lake Elsinore) announced she introduced Assembly Bill 71, which seeks to enact clear provisions protecting independent workers while rolling back the dangerous precedent set in the California State Supreme Court decision Dynamex Operations West v. Superior Court.

“This legislation addresses the chilling and potentially harmful impacts the Dynamex decision will have on the business community in our state and for the nearly 2 million Californians who have made the choice to have flexible work schedules as independent contractors,” said Melendez.

AB 71 codifies the near 30-year old “Borello test” that had, prior to Dynamex, provided the basis for hiring or using independent contractors in California. These factors include, but are not limited to, the right to fire at will without cause and how to determine the method of payment, whether it’s by the job or the time it takes.

“Sacramento is dominated by powerful labor union special interests that have constantly stood in the way of independent workers,” said Melendez. “My attempt this past session, to shed some light on this issue, was stifled by those special interests.  Without clear legislative action, the Dynamex case could unravel gig and tech economies and threaten the traditional business models of REALTORS, teachers, beauticians, truck drivers, construction trades and countless other professions.”

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Assemblywoman Melissa A. Melendez represents the 67th Assembly District, which includes the communities of Lake Elsinore, Canyon Lake, Murrieta, Menifee, Wildomar and a portion of Hemet. It also includes the Riverside County unincorporated areas of Lake Mathews, Good Hope, Nuevo, and Winchester. Follow her on Twitter: @asmMelendez


LEGISLATIVE COUNSEL’S DIGEST

 

AB 71, as introduced, Melendez. Employment standards: independent contractors and employees.
Existing law prescribes comprehensive requirements relating to minimum wages, overtime compensation, and standards for working conditions for the protection of employees applicable to an employment relationship. Existing law makes it unlawful for a person or employer to avoid employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor. Existing law authorizes the Labor and Workforce Development Agency to take specified actions against violators of these provisions, authorizes civil penalties, and authorizes the Labor Commissioner to enforce those provisions pursuant to administrative authority or by civil suit.
Existing case law establishes a three-part test, known as the “ABC” test, for determining whether a worker is considered an independent contractor for purposes of specified wage orders. Under this test, a worker is properly considered an independent contractor only if the hiring entity establishes; 1) 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 performance of the work and in fact; 2) that the worker performs work outside the usual course of the hiring entity’s business; and 3) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
This bill would, instead, require a determination of whether a person is an employee or an independent contractor to be based on a specific multifactor test, including whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired, and other identified factors. The bill would make related, conforming changes.

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