Lawmaker Says Bill to Codify Dynamex Is Declarative of Existing Law

Wednesday, March 27, 2019 | 2

A Southern California lawmaker said her bill that would write into the Labor Code the three-part test to determine employee status created by the state’s high court last year is declarative of existing law in the Golden State.

Assemblywoman
Lorena Gonzalez

Assemblywoman Lorena Gonzalez, D-San Diego, said language in Assembly Bill 5 that would codify the so-called “ABC Test” the state Supreme Court created in Dynamex West Operations v. Superior Court was “a declaration of existing law,” according to a report by the Los Angeles Times.

Gonzalez told the newspaper she doesn’t want to interfere with legitimate contracting arrangements. She said she wants to make sure employees receive benefits to which they’re entitled.

“We don’t want to stop true independent contractors from having their own little business,” she said. “But we don’t want to continue this farce of large businesses declaring their people are independent contractors.”

She also told the newspaper about plans to introduce amendments to the bill as early as today.

The high court in April 2018 said that for the purposes of wage-order claims, businesses must prove their workers are not employees by satisfying three conditions:

• The worker is free from the control and direction of the hiring party.
• The person is performing work that’s outside the usual course of business for the hiring entity.
• The worker is customarily engaged in an independent trade providing similar services.

Courts have held that the Dynamex decision is limited to wage-order disputes. AB 5 would write the three-part test from the decision into the Labor Code for the purposes of resolving all disputes over whether a worker is an employee.

If enacted, the bill would result in the ABC Test from Dynamex replacing the 10-part test from a 1989 high court decision in S.G. Borello & Sons Inc. v. Department of Industrial Relations for deciding who is an employee and entitled to work comp benefits for an industrial injury.

Meanwhile, Assemblywoman Melissa Melendez, R-Lake Elsinore, introduced AB 71, which would require the use of the 10-part test from S.G. Borello & Sons to resolve all disputes about whether a worker is an employee or contractor.

Hearings have not been scheduled for either AB 5 or AB 71.