From Lexology, Holly H. Williamson and Andrea Oguntula discuss a recent case filed that challenges California’s independent contractor statute alleging that it violates the Equal Protection Clause of the Fourteenth Amendment. Holly and Andrea write:
A lawsuit recently filed in the U.S. District Court for the Central District of California is testing the constitutional limits of California’s worker classification law. In the suit entitled Blu Nail Bar, Inc et al v. Newsom et al, a group of Vietnamese American-owned nail salons in Southern California are suing the state, alleging that the application of Assembly Bill 5 (AB 5) violates the Equal Protection Clause of the Fourteenth Amendment.
The plaintiffs argue that AB 5 discriminates against nail technicians by requiring them to be classified as employees, while exempting other beauty industry professionals such as barbers, hairstylists, and cosmetologists.
AB 5 was signed into law in September 2019 following the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court, which adopted the “ABC test” for determining independent contractor status. The law codified this standard and extended its application to the Labor Code, Unemployment Insurance Code, and Industrial Welfare Commission wage orders. It establishes a strict presumption that workers are employees unless all three prongs of the ABC test are met. Under this test: (1) the worker must be free from the control and direction of the hiring entity in both contract and practice; (2) the work performed must fall outside the usual course of the hiring entity’s business; and (3) the worker must customarily engage in an independently established trade, occupation, or business of the same nature as the work performed. If any one of these criteria is not satisfied, the worker must be classified as an employee.
The complaint alleges that the law disproportionately impacts Vietnamese American salon owners and manicurists. According to the plaintiffs, this burden falls unequally on a single racial and ethnic group, disrupting a longstanding business model in which manicurists operated as independent contractors, often renting space from a salon owner, setting their own hours, and managing their own clients.
Read the rest of the story: California Independent Contractor Law Challenged Under 14th Amendment – Lexology