When can companies in California classify their workers as independent contractors instead of employees?

According to a report by KQED, that’s the question that’s been hot on the minds of California lawmakers, labor unions and tech companies since April, when the California Supreme Court ruled that businesses must satisfy three guidelines to classify workers as contractors.

In Dynamex Operations West, Inc. v. Superior Court, the state Supreme Court ruled that a worker can be considered a contractor only if: A. The worker is free from the control and direction of the hirer in connection with the performance of the work. B. The worker performs work that is outside the usual course of the hiring entity’s business. C. The worker is customarily engaged in an independently established trade, occupation, or business. This is now known as the ABC Test.

Allan Zaremberg, head of the California Chamber of Commerce, said the ruling puts the Legislature in a unique position. A state law could override the court decision and return California to the pre-Dynamex test for employee status.

The court’s decision is especially concerning to tech companies like Uber, Lyft and Instacart, whose businesses rely heavily on a revolving army of contractors. They’re among a group of tech firms partnering with the state Chamber of Commerce to lobby for legislation that would loosen restrictions on who could be included as a contractor.

Without a new law, these companies would have to abide by the court’s guidelines.

Uber, which has long been the largest and most influential on-demand gig company in the country, has always insisted that its drivers are not employees. The San Francisco-based company argues that it’s not a taxi company, but rather a tech firm that creates a platform or marketplace to connect riders to independent drivers. In other words, it says, its employees are the people who build its technology, not the one who drive people around.

It’s the second requirement of the Dynamex ruling that poses the biggest dilemma for big gig-focussed companies like Uber. Because the San Francisco-based firm is in the business of giving rides, and its drivers are the ones who provide them, the company would be hard-pressed, under the court’s guidelines, to classify those workers as anything but employees.

“Some companies feel like that test is going to alter their business model, and in some cases that’s true,” said Steve Smith, a spokesman for the California Labor Federation, which would like to see more workers classified as employees. If that presents a hardship for some tech companies, that’s just too bad, Smith added.

Assemblywoman Lorena Gonzalez, D-San Diego, authored AB 5, a bill that would require companies to follow the court’s guidelines. It might not make sense for all workers to be classified as employees, she said, but gig workers still need some protections.

Another bill, AB 71, would roll back the court’s recent decision.

Uber and other gig companies have taken various steps in recent years to ensure that they can continue categorizing their workers as contractors. In some cases, like New York, they have set up drivers’ organizations, which have less power than union organizations. Many workers don’t see this as a sufficient solution.

This fight also places Gov. Gavin Newsom, who received campaign support from both labor and the tech industry, in a particularly tricky position. He contends the issue should have been resolved before it went to court, and has urged both sides to find common ground.

He recently said his administration is even considering the creation of a committee to address the issue. “Because we could have been making determinations before that case ended up at the court,” he said.

The Employer’s Fraud Task Force will discuss “The NEW 2019 Employment Laws That Will Impact Your Workplace” at its next luncheon meeting on January 22. Registration begins at 11:00 am.

Those who attend will learn about the new 2019 Employment Laws of California, most of which will became effective January 2019. Training will include an Overview of:

– The New #Metoo Harassment Laws
– The New Harassment Training Requirements
– Miscellaneous Employment Related Laws

The speaker is Bernadette O’Brien, ESQ .She is a Partner at Floyd Skeren Manukian Langevin, LLP and an SPHR certified/SHRM-SCP Human Resources Executive.

Ms. O’Brien serves as general counsel and executive advisor to the law firm’s Human Resources Department and is Managing Attorney of the firm’s Employment Law Department and HR Consultation Department. She is the Managing Attorney-Employment Law Department of the firm.

Ms. O’Brien is author of the popular LexisNexis publication Labor and Employment in California: A Guide to Employment Laws, Regulations and Practices, co-author of California Leave Law: A Practical Guide for Employers, and co-author of California Unemployment Insurance and Disability Compensation Programs.

Ms. O’Brien has been a frequent contributor to, and reporter for, the LexisNexis employment law newsletter Bender’s California Labor & Employment Bulletin.

She is also editor and developer of Floyd Skeren Manukian Langevin’s employment related websites: www.employmentlawweekly.com, www.worklawreport.com, and www.floydskerenhrtraining.com, which provide the latest news and information related to employment law.

The meeting will take place at the Steven’s Steak House, located at 5332 Steven’s Place in Commerce, California. If you plan to attend, you may register online at the EFTF website.

DWC posts additional adjustments to Official Medical Fee Schedule for Pathology and Clinical Laboratory, for Hospital Outpatient Departments / Ambulatory Surgical Centers, for Physician Services/Non-Physician Practitioner Services, and posts updated MTUS Drug List Effective February 15.

The order is the second Administrative Director order for the January 2019 annual update to the Pathology and Clinical Laboratory Fee Schedule. The Centers for Medicare and Medicaid Services issued a revised 2019 Pathology and Clinical Laboratory Fee Schedule file on January 15, 2019.

The revised file corrects various technical errors and supersedes the original file.

The initial update to the Physician and Non-Physician Practitioner Fee Schedule. effective for services rendered on or after January 1, 2019, was posted to the DWC website on December 10, 2018.  The Centers for Medicare and Medicaid Services subsequently issued a revised update to the 2019 Physician Fee Schedule on December 20 that made corrections to the Relative Value Unit file and the Geographic Practice Cost Index file.

This second order adopts those corrections.

The update orders adopting the adjustments can be found on the DWC website.

The changes to the MTUS Drug List, based on the American College of Occupational and Environmental Medicine (ACOEM) Practice Guidelines, including the following:

– Addition of drugs addressed in the Traumatic Brain Injury Guideline
– New and Revised, Drug Recommendations (related to the Traumatic Brain Injury Guideline)
– Designation of additional drugs as “special fill” eligible, due to treatment recommendation in the Traumatic Brain Injury Guideline

Additional information regarding the MTUS drug formulary may be found on the MTUS Drug Formulary webpage.

Walgreens Boots Alliance Inc. and Microsoft Corp. have joined forces to develop new health care delivery models, technology and retail innovations to advance and improve the future of health care.

Current health care systems are a complex combination of public- and private-sector organizations, providers, payors, pharmaceutical companies and other adjacent players. While there has been innovation in pockets of health care, there is both a need and an opportunity to fully integrate the system, ultimately making health care more convenient to people through data-driven insights.

The companies have committed to a multiyear research and development investment to build health care solutions, improve health outcomes and lower the cost of care. This investment will include funding, subject-matter experts, technology and tools. The companies will also explore the potential to establish joint innovation centers in key markets.

The companies will focus on connecting WBA stores and health information systems to people wherever they are through their digital devices. This will allow people to access health care services, such as virtual care – when, where and how they need it.

Working with patients’ health care providers, the companies will proactively engage their patients to improve medication adherence, reduce emergency room visits and decrease hospital readmissions. Core to this model is data privacy, security and consent, which will be fundamental design principles, underscored by Microsoft’s investments in building a trusted cloud platform.

WBA and Microsoft will also focus on enabling more personalized health care experiences from preventative self-care to chronic disease management. WBA will pursue lifestyle management solutions in areas such as nutrition and wellness via customers’ delivery method of choice, including digital devices and digital applications or in-store expert advice.

Through a combination of dedicated R&D and external partnerships, a suite of chronic disease management and patient engagement applications are planned for development, alongside a portfolio of connected Internet of Things (IoT) devices for nonacute chronic care management, delivered by Microsoft’s cloud, AI and IoT technologies.

The companies will work to build a seamless ecosystem of participating organizations to better connect consumers, providers – including Walgreens and Boots pharmacists – pharmaceutical manufacturers and payors. Microsoft and WBA will leverage each other’s market research and identify the right partners to develop solutions.

Early last year, Amazon.com Inc, Berkshire Hathaway Inc and JPMorgan Chase & Co had said they will form a company that could eventually negotiate directly with drugmakers and healthcare providers and use their vast databases to get a better handle on costs.

The Chairman of the Committee on Oversight and Reform, launched one of the most wide-ranging investigations in decades into the prescription drug industry’s pricing practices.

“The Committee on Oversight and Reform is investigating the actions of drug companies in raising prescription drug prices in the United States, as well as the effects of these actions on federal and state budgets and on American families,” Cummings wrote.

“For years, drug companies have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs while recording windfall profits. The goals of this investigation are to determine why drug companies are increasing prices so dramatically, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices.”

Cummings sent letters to 12 drug companies seeking detailed information and documents about the companies’ pricing practices. The letters seek information and communications on price increases, investments in research and development, and corporate strategies to preserve market share and pricing power. The letters are the first step in the Committee’s comprehensive review of pricing practices. The Committee will hold its first of several hearings in the coming weeks to hear from experts, as well as patients affected by rising drug prices.

The Centers for Medicare and Medicaid Services projects that spending on prescription drugs will increase more rapidly than spending on any other health care sector over the next ten years. The federal government bears much of the financial burden of escalating drug prices through Medicare Part D, which provides drug coverage to approximately 43 million people. The government is projected to spend $99 billion on Medicare Part D in 2019. In 2016, the 20 most expensive drugs to Medicare Part D accounted for roughly $37.7 billion in spending.

A review by the Inspector General of the Department of Health and Human Services found that ten of the most expensive brand-name drugs accounted for $15.6 billion of spending in the catastrophic coverage phase of the Medicare Part D benefit in 2015. The Inspector General has also found that Part D payments for brand-name drugs increased by 62% from 2011 to 2015—after taking into account manufacturer rebates—even though the number of prescriptions fell by 17%.

Approximately 94% of widely-used brand-name drugs on the market between 2005 and 2017 more than doubled in price during that time, and the average price increase in 2017 was 8.4% – four times the rate of inflation – according to an analysis conducted by AARP. A recent Associated Press analysis found that more than 4,400 brand-name drugs increased in price in the first seven months of 2018 alone, compared to 46 price decreases.

In today’s letters, Cummings is focusing on drugs that are among the costliest to Medicare Part D, among the costliest per beneficiary, or had the largest price increases over a five-year period.