From JDSupra, Matthew Goldberg, Jessica Millar, Jill Ripke, Heather Sager, and Daniel XuLi discuss California legislation including those affecting independent contractors: Matthew, Jessica, Jill, Heather and Daniel write:
With the 2021 California legislative year closed, it is now time to examine the new legislation that will affect California companies. We have summarized the key new legislation below, with relevant action items noted. Companies should work with experienced legal counsel to determine the best approach for their organization to ensure compliance with the latest California developments.
Criminal Charges for Wage Theft (AB 1003)
Effective Date: January 1, 2022. This bill adds a new type of grand theft to the Penal Code for an intentional theft of wages (deliberate failure to pay all amounts due), if greater than $950 (from any one employee or independent contractor), or $2,350 (in the aggregate) in a 12-month period. Further description of the law is found here.
Action item: Employers should review their wage-and-hour practices, including bonuses, tips, and gratuities and consider implementing an annual wage-and-hour audit with the assistance of counsel.
Extended Contractor Exemption for Newspaper Industry Employees (AB 1506)
Effective Date: January 1, 2022. AB 1506 extends the existing exemption from the “ABC” independent contractor/employee test for newspaper distributors and newspaper carriers through January 1, 2025. This means that the more expansive Borello test (described here in question 5) will continue to apply in this context. The new law also requires newspaper publishers and distributors to report specified information to the Labor and Workforce Development Agency (LWDA).
Action item: Newspaper publishers and distributors should review the applicability of the Borello test to any independent contractor relationship and should review the new reporting requirements to the LWDA.
Modification to Other Contractor Exemptions (SB 1561)
Effective Date: January 1, 2022. Several of the exemptions from the “ABC” independent contractor/employee test have been modified. The bill addresses data aggregators, licensed manicurists, subcontractors in the construction industry, underwriters, and manufactured housing dealers.
Action item: Employers with questions about whether workers should be classified as independent contractors or employees should contact counsel to evaluate on a case-by-case basis.