How Does Assembly Bill 5 Protect Workers From Misclassification?

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Posted by Legal Team On July 17, 2023

Assembly Bill 5 (AB 5) aims to protect a range of workers, not only those employed in gig jobs and digital platform companies, such as driving and shopping services, from classification as independent contractors and requiring companies to meet an employee standard in hiring.

Assembly Bill 5 (AB 5) allows employees more coverage and protection in their field of choice by following simple guidelines to determine their worker status. How will this bill protect you if you?

Determining Employment Status

The California Supreme Court adopted a standard in 2018 to determine if workers qualify as employees or independent contractors. The ABC test is beneficial in determining wages and benefits under the Unemployment Insurance Code, Labor Code, and Industrial Welfare Commission (IWC) wage orders.

Three conditions must exist to establish an individual as an independent contractor. Those conditions are:

  • Part A: Someone outside of the hiring company is responsible for overseeing the work being performed and offering guidance on how it is completed
  • Part B: As a worker, the job being performed is out of the realm of the jobs that are standardly performed by the corporation or business
  • Part C: A worker is already performing work of a similar description but in an independent manner or trade.

When all three conditions are not met, it becomes the hiring entity’s responsibility to provide particular protections for a worker. As an independent contractor, an individual is responsible for covering many expenses that protect from injuries and unemployment and provide a means to contribute to retirement. Additionally, AB 5 requires an employer to meet wage guidelines.

Benefits Afforded Employees

Workers who do not meet the above-mentioned criteria are afforded specific benefits under the law. These benefits are critical to an individual during more vulnerable stages in life. The intention of becoming unemployed or injured on the job is not a goal of independent contractors, but situations can change quickly and dramatically, leaving a worker in a vulnerable position.

Additionally, having a family should not cost you your job when a family member’s illness requires your care. The Armstrong Law Firm is dedicated in its fight for San Francisco employees in California wrongful termination claims.

Preventing the misclassification of workers allows employees to provide for their families by affording a better wage and requiring overtime pay when extra work is needed. Additionally, employers will see the benefit of hiring more workers to prevent overworking and burnout that often accompanies industries that are not required to pay these wages.

Under AB 5, companies are required to provide workers with the following benefits:

  • A standard minimum wage
  • Overtime pay
  • Paid sick days
  • Paid family leave
  • Unemployment insurance
  • Workers’ Compensation
  • Payment into social security and medicare

Industry Accountability

AB 5 requires industry accountability, protecting the economy locally and nationwide by enforcing tax laws. Companies seeking to classify workers improperly avoid paying into Medicare, Social Security, unemployment insurance taxes, and workers’ compensation insurance.

The burden of support then falls to the state and federal government to provide services when individuals become ill, cannot work, or meet their basic needs due to unemployment and lack of unemployment benefits. A worker stands to lose thousands of dollars without these protections.

Protecting Yourself from San Francisco Misclassification

Becoming familiar with local laws is always recommended. A larger paycheck in lieu of benefits may seem appealing but can be costly in the long run. Always speak with a San Francisco misclassification attorney to protect your rights as a worker if you feel you have been misclassified.