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SB-1039 Independent workers.(2019-2020)

Current Version: 02/14/20 - Introduced Compare Versions information image



Senate Bill
No. 1039

Introduced by Senator Galgiani

February 14, 2020

An act relating to worker classification.


SB 1039, as introduced, Galgiani. Independent workers.
Existing law, as established in the case of Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex), creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission. 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 specified wage orders.
Existing law establishes that, for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission, 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. This test is commonly known as the “ABC” test. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification.
This bill, known as “The Independent Worker Rights Act of 2020,” would set forth legislative findings regarding the intent of the Legislature to develop a modern policy framework that facilitates independent work for those who voluntarily choose it by creating a third classification of workers with basic rights and protections relative to work opportunities, including minimum wage and occupational accident coverage.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


 (a) This act shall be known as “The Independent Worker Rights Act of 2020.”
(b) The Legislature finds and declares all of the following:
(1) On January 1, 2020, Assembly Bill 5 (hereafter AB 5; Chapter 296 of the Statutes of 2019) went into effect, codifying the decision of the California Supreme Court in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex) applying the “ABC” test to classify workers as independent contractors or employees.
(2) In enacting AB 5, the Legislature intended to rectify harm to misclassified workers who lose workplace benefits and protections when misclassified, including the guarantee of minimum wage, workers’ compensation, disability insurance and protection from discrimination.
(3) The enactment of AB 5 has led to a reclassification of independent workers as employees, resulting in the loss of opportunities for these workers due to the cessation of businesses operating in California. This has resulted in fewer opportunities for independent workers desiring flexible working conditions in the current economy.
(4) In fact, according to the Federal Reserve, there are currently more than 57,000,000 workers in the gig economy, with 85 percent of those workers pursuing work in the gig economy to supplement income or as a hobby or “just for fun,” and only 16 percent pursuing work in the gig economy as their primary source of income.
(5) As a result, it has become increasingly obvious that a binary system for classifying workers as either independent contractors or employees is outdated and inapposite of the current reality of the labor market and work opportunities presented in the gig economy and the desire of workers seeking flexible working conditions. Currently, the Governor’s Future of Work Commission is examining the impact of technology on work, workers, employers, jobs, and society to develop a new social compact for California workers. With executive action towards modernizing worker safety net protections, it is the intent of the Legislature to enhance the efficiency of the labor market by extending many of the legal benefits and protections found in employment relationships to independent workers.
(6) The Legislature intends to develop a modern policy framework that facilitates independent work for those who voluntarily choose it by creating a third classification of workers in order to offer basic rights and protections they deserve under the law relative to the work opportunities and circumstances of the work, including a minimum wage, occupational accident coverage if they are injured on the job, protection from discrimination, and paid medical leave where required by law.