Case Brief 4: Employees vs Independent Contractors – Homework Solution 

Case Brief 4: Employees vs Independent Contractors

Directions:

For Unit IV’s “Case Brief”, I am not asking you to analyze a case, but rather to analyze a piece of legislation – specifically, a California State statute. Knowing how to read and understand statutes is not just a skill for legal professionals – as a business owner/manager, this skill can help save you time and money! Please review, “How to Read a Statute download“, and then proceed to the questions below.

California statutes are the laws enacted by the California legislature and signed by the California Governor. California statutes are binding authority on all individuals and entities in California. After you have read the statute, please provide complete answers to the four questions following the prompt below.

California statutes are the laws enacted by the California legislature and signed by the California Governor. California statutes are binding authority on all individuals and entities in California. After you have read the statute, please provide complete answers to the four questions following the prompt below.

On September 18, 2019, California Governor Gavin Newsom signed into law a contentious piece of legislation—AB-5 

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5 —that will potentially reclassify millions of independent contractors as employees and dramatically reshape the future of independent workforces in California and beyond.

As its nickname, the “gig worker bill” suggests, much of the discussion around the new law has focused on its effects on the Ubers and Lyfts of the world. But it is actually far, far bigger than that, with the potential to touch nearly all companies in California—and even some outside of California—that use independent contractors.

Case Brief 4: Employees vs Independent Contractors

Your assignment is to review the bill, and answer the following questions (you do not need to use the Case Brief format):

1. AB-5 (Links to an external site.) codifies a decision by the California Supreme Court in a 2018 case. What was that case called?
2. Why do you think the state legislature adopted this new law, i.e., what problem(s) were they trying to “fix”?
3. Which California State Code(s) did AB-5 amend?
4. The law codifies what is now known as the “ABC” test for classifying independent contractors. Describe the 3 prongs of that test.
5. Does the new law provide any exceptions? If yes, name two of these exceptions.

**Important Note: There is a new version of AB5 is called Assembly Bill 2257 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5. It was signed into law by the Governor of California on September 4, 2020 and replaces AB5. In addition, the passage of Prop 22 in November’s election will result in changes to the application of AB5/AB2257 for platform-based workers. However, for this assignment, you only need to consider the original statute, AB5.