- Category: Labor
The passage of AB5 will arguably, shape the future of labor in California and the Nation. Whether it is amended by the legislature, overturned by a 2020 ballot initiative or overturned at the judicial level, the next year looks to be a tumultuous and uncertain time for business owners, and even some workers.
I know how it feels to be sure of your cause and case and then how it feels to be kicked in the gut by a reality that it's not IF I was going to pay in a wage theft and misclassification lawsuit, but rather, HOW MUCH? Guilt or exoneration mattered in the letter of the law, but not in the spirit of it's intent, which was to provide workers with competitive pay and benefits while not giving "cheaters" a competitive business advantage over those that comply with the law and "pay their fair share". Even if you're paying your workers more as independent contractor, all of that becomes irrelevant when the authorities come knocking so to speak.
The conflicting truth is: Not all workers want to be employees and some businesses provide better pay than their counterparts paying an hourly rate, as well as, not all workers are exploited nor are all owners using independent contractors, nefarious criminals.
There are many instances where a worker benefits more by the flexible nature of the independent contractor relationship and also earns more based upon a desired output productivity and not based upon the time spent on the clock.
But once a judicial ruling like Dynamex becomes codified into the statutes of the state constitution, the analogy looks a little like this: the light you see at the end of the tunnel ... isn't the end, it's an oncoming freight train and you will either be in front of it or on it.
I can share with you my experiences being on the receiving end of the law, but I cannot offer you legal advice. Only an attorney can offer legal advice and my insight in no way is meant to be provided or received as such. I've spent plenty of money over the years for good legal advice for my businesses in order to navigate the litigious minefield of California business and labor operations.
Additionally, I've been through an IRS audit and a liability insurance audit for my independent contractors, in addition to a wage theft and misclassification suit mentioned earlier, and had found ways to comply with the law prior to AB5, both working with employees and independent contractors.
Over the years, another local business owner and friend has passed regular inspections of his books by the EDD to operate with an independent contractor and employees.
This will all change at the end of 2018. Most business cannot pass part B of the ABC Test and must, therefore, convert to employees, find a legal exemption or cease operations if they do not want to run afoul of the State authorities. You don't want to be in violation of this law after January 1, 2020.
Hopefully I can help you avoid the mistakes I made back in 2013, and avoid having your business ravaged by wage theft and misclassification suits brought because you're doing something you think is ok, but is actually quite stupid in the long (or short) run.
Don't ruin all you've built. Text or call me.
Together, we can find people and ways to help, whether you need attorneys, accountants, business coaches and consultants, new ideas ideas or just someone to listen.
Brite and Clean, Inc