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The controversial proposed law, A.B. 5 was passed by the California Assembly on May 29 and has now been moved to the Senate.

The law is an act to add Section 2750.3 to the Labor Code. It would state the intent of the Legislature to codify the decision in the Dynamex case and clarify its application. The bill would provide that the factors of the “ABC” test be applied in order to determine the status of a worker as an employee or independent contractor for all provisions of the Labor Code and the Unemployment Insurance Code, unless another definition or specification of “employee” is provided.

Many self-employed workers and business owners urged California lawmakers to expand the bill, allowing more gig workers to be exempted from employee status.

Those seeking an expansion of the legislation want a variety of other workers exempted, including architects, engineers, lawyers, real estate agents, therapists, accountants, barbers, hair stylists and others who have advanced degrees, are licensed by the state or simply want to remain independent contractors.

California is estimated to have nearly 2 million residents who choose to work as independent contractors, according to the U.S. Bureau of Labor Statistics, and that doesn’t count people who supplement their income through online work.

The bill as it is now written, appears to have responded to certain groups seeking to remain independent. It would now exempt specified professions from these provisions and instead provide that the employment relationship test for those professions shall be governed by the test adopted in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 if certain requirements are met.

These exempt professions would include licensed insurance agents, certain licensed health care professionals, registered securities broker-dealers or investment advisers, a direct sales salesperson, real estate licensees, workers providing hairstyling or barbering services, and those performing work under a contract for professional services.

The bill would require the State Board of Barbering and Cosmetology to promulgate regulations for the development of a booth rental permit and a reasonable biennial fee upon workers providing specified hairstyling or barbering services, by no later than July 1, 2021.

If the bill becomes law, on-demand tech companies are expected to challenge it in court, as they have built their businesses on the independent-contractor model. The law also is opposed by small-business groups, which say it would crush business to classify certain workers as employees. And some independent contractors say they’re already feeling the brunt of the California Supreme Court decision, which has led some news outlets to stop commissioning freelancers because they fear breaking the law.