Almost every year, and sometimes in the middle of the year, the California Legislature enacts new employment laws affecting employers and employees. 2020 is no exception to this trend. In fact, there are several very important new laws that take effect on January 1, 2020 and will impact the workplace for all involved.
Assembly Bill 5: The “ABC Test”
- This new law is commonly referred to as the “ABC Test.” AB5 essentially codifies the semi-recent California Supreme Court decision in Dynamex Operations West, Inc. v. Superior Court, in which the Court created a new test to determine whether an individual performing services for an entity is to be considered an employee or an independent contractor.
- The Court in Dynamex, and now the California Legislature, have decided that to be considered a properly classified independent contractor, an individual must meet all of the following three factors:
- The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
- the worker performs work that is outside the usual course of the hiring entity’s business; and
- the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
- There are some exceptions to AB5. For example, the Legislature exempted from the reach of the ABC Test the following categories of workers: physicians, surgeons, dentists, podiatrists, psychologists, veterinarians, insurance brokers, lawyers, architects and engineers, private investigators, accountants, registered securities broker-dealers and investment advisers, direct sales salespeople, marketing professionals, travel agents, human resources administrators, graphic designers, grant writers, fine artists, and a few others, all of whom must still meet the requirements of the previous Borello test to be considered properly classified independent contractors.
Assembly Bill 51: Prohibition of Mandatory Arbitration Agreements
- Starting at the beginning of this year, employers cannot force applicants or employees in California to agree, as a condition of their employment, continued employment, or the receipt of any employment-related benefit, to arbitrate claims involving violations of the California Fair Employment and Housing Act (FEHA) or the California Labor Code. The statute does not affect existing arbitration agreements that are otherwise enforceable under the Federal Arbitration Act (“FAA”), but will apply to agreements entered into this year.
- This new law is being challenged as inconsistent with federal law and thus preempted, and it remains to be seen whether the courts will overturn it. But as of now, it is the law of the State of California and is in full effect.
Assembly Bill 9: Expanding the FEHA Statute of Limitations
- Until now, the statute of limitations (i.e., the deadline) for filing charges of discrimination, harassment, or retaliation with the California Department of Fair Employment and Housing has been one year from the date of the alleged unlawful practice. Effective as of January 1, 2020, the limitations period expands to three years, giving employees far more time to prepare to file a claim and potential lawsuit, and requiring that employers defend much older claims that would have previously been barred by the statute of limitations.
If you have questions about the new laws discussed above, any other new employment laws, or employment law generally, do not hesitate to reach out to Dhillon Law Group for advice. We are happy to help both employees and employers in all of their employment law needs.
John Paul S. Deol is Senior Counsel with Dhillon Law Group Inc., and handles employment litigation and counseling.