The California Assembly Bill 5, spurred by decades of employee misclassification, limits the categorization of independent contractors. It places the burden on employers to show that workers meet certain conditions.
All employees and independent contractors (pre-existing and new) must meet the following standards:
- The worker is free from the control/direction of the hirer in connection with worker performance.
- A worker performs work outside the usual needs of the hirer’s business.
- The worker has skills in an independently established trade, occupation, or business similar to the work performed.
What if your business isn’t located in California?
This law is still important to know because many states already have similar laws in place. States can also use this law as a precedent to roll out new independent contractor protection bills. Misclassification within this new legislation could be detrimental. It could lead to litigation and legal fines as well as unfinished or late projects. To top it off, if you use independent contractors to help on specialized projects and they need to be reclassified, you may have to comply with a slew of regulations such as workers comp, social security tax obligations, insurance, overtime pay, and more.
Preparing for January without skipping a beat.
The knee-jerk reaction may be to simply hire full-time staff but we know that not every role or project requires a full-time employee and their associated costs. Contractors are one of the few cost-effective and quick ways to utilize specialized one-off skills for unique and fast-paced projects.
So how can you prepare for California Assembly Bill 5 without the stress and risk? Consider adding a staff member from TechBridge Inc.
We specialize in placing highly-skilled, experienced, and driven team members in contracted positions for Adobe Experience Cloud, Salesforce, Sitecore, and Magento projects. And you won’t have to worry about compliance in California or any other state because each of our team members isn’t considered independent contractors but employees of ours — giving you the best of all worlds.
We can connect you with the right talent for the right job quickly. So while it’s incredibly important to know and understand California Assembly Bill 5 and be aware for January 1, 2020 — it’s a worry-free world if you’re with us.
Contact TechBridge to learn more about our contractor and staffing process today.