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AB-1433 Worker classification: employees and independent contractors: trainees in a technology educational program. (2021-2022)

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Date Published: 02/19/2021 09:00 PM
AB1433:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1433


Introduced by Assembly Member Irwin

February 19, 2021


An act to add Section 2784.1 to the Labor Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


AB 1433, as introduced, Irwin. Worker classification: employees and independent contractors: trainees in a technology educational program.
Existing law requires a 3-part test, commonly known as the “ABC” test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification. Existing law exempts specified occupations and business relationships from the application of these provisions. Existing law instead provides that these occupations and business relationships are governed by the test adopted in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello).
This bill would exempt from existing law the relationship between a trainee in a technology educational program receiving a scholarship or stipend and the provider of the technology educational program, as defined, under specified conditions. Under the bill, if the conditions are met, the determination of whether a trainee is an employee or independent contractor of the provider would be governed by Borello.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 2784.1 is added to the Labor Code, to read:

2784.1.
 (a) Section 2775 and the holding in Dynamex do not apply to the relationship between a trainee in a technology educational program receiving a scholarship or stipend and the provider of the technology educational program, as defined below, and the determination of whether the trainee is an employee or independent contractor of the provider of the technology educational program shall be governed by Borello, under the following conditions:
(1) The training received by the trainee is similar to that which would be given in a vocational school or educational program;
(2) The training is specifically designed for a career in the technology industry, including web and application development, design, online marketing, customer relationship management software administration, application programming interface, and entrepreneurship;
(3) The provider of the technology educational program derives no direct advantage from the activities of the trainee and does not restrict the trainee from additional work or employment outside of the educational program, including the portfolio of work created during the program;
(4) The trainee does not displace regular employees in the course of receiving the training;
(5) The trainee is not entitled to employment or contract work doing the same responsibilities at the conclusion of the training period from the technology educational program provider;
(6) The technology educational program and the trainee’s participation in the technology educational program occur over a defined period of time; and
(7) The trainee has the ability to exit the program without restriction from the technology educational program provider.
(b) For the purposes of this section, a “technology educational program” is an education and learning experience designed to benefit individual trainees, who otherwise could not attend without a scholarship paid by weekly stipend, to develop technical and soft skills that will help the trainee bridge the gap between learning and working in the technology industry.