New Bill Would Add Exemptions to AB 5

AB 5, which was enacted last fall, codified the “ABC Test” pursuant to the California Supreme Court’s Dynamex decision. AB 5 also contains 57 different exemptions for specified professions. 

      While nearly three dozen measures in the Assembly and Senate would create additional exemptions, SB 900 was recently amended to add 12 exemptions. SB 900 is authored by the Chairman of the Senate Labor & Industrial Relations Committee, Jerry Hill (D – San Mateo). SB 900 also retains all 57 exemptions from AB 5, but the bill reorganizes them into new sections of the Labor Code.

      SB 900 (Hill) basically does four things:

1.     Amends Labor Code Section 50.6 dealing with the Department of Industrial Relations (DIR) assisting and cooperating with the U.S. Department of Labor (USDOL) in enforcing the Fair Labor Standards Act in California; makes technical changes to the code section; and, allows DIR to be reimbursed by the USDOL for reasonable costs associated with assistance and cooperation.
2.     Repeals Labor Code Section 2750.3, which is AB 5.
3.     Adds new Article 1.5 (commencing with Section 2775) to the Labor Code, which is the reorganized language from AB 5 along with the 12 additional exemptions.
4.     Amends Unemployment Insurance Code Section 650 dealing with the definition of “employment” and excluding specified services; adds manufactured housing to the list; and, excludes from the definition of a retail or wholesale establishment a bus, van or truck from which an individual seller sells products used for repair and maintenance of motorized vehicles.

      The following exemptions are proposed to be added to the law by SB 900: 

•     Licensed professional clinical counselors licensed by the State of California pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, performing professional or medical services provided to or by a health care entity, including an entity organized as a sole proprietorship, partnership, or professional corporation as defined in Section 13401 of the Corporations Code.
•     Licensed clinical social workers licensed by the State of California pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, performing professional or medical services provided to or by a health care entity, including an entity organized as a sole proprietorship, partnership, or professional corporation as defined in Section 13401 of the Corporations Code.
•     Marriage and family therapists licensed by the State of California pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, performing professional or medical services provided to or by a health care entity, including an entity organized as a sole proprietorship, partnership, or professional corporation as defined in Section 13401 of the Corporations Code.
•     Manufactured housing salespersons as described in Section 650 of the Unemployment Insurance Code, so long as the conditions for exclusion from employment under that section are met.
•     Newspaper distributors working under contract with a newspaper publisher.
•     Newspaper carriers working under contract either with a newspaper publisher or newspaper distributor.
•     Amateur athletic officials supervising an amateur sporting contest held by an amateur sports organization.
•     Franchisees, as defined in Sections 31005 to 31006, inclusive, of the Franchise Investment Law (Division 5 (commencing with Section 31000) of Title 4 of the Corporations Code).
•     Security researchers participating in a vulnerability bounty, vulnerability disclosure, or similar program of an authorizing entity.
•     Appraisers, as defined in Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.
•     Certified shorthand reporters as defined in Chapter 13 (commencing with Section 8000) of Division 3 of the Business and Professions Code, except as acting as an official court reporter.
•     Certified interpretation or translation services, which means a person who has proof of good standing, certification, or a credential number from one of the following organizations: the Judicial Council of California, Federal Courts, United States Department of State, American Translators Association, International Association of Conference Interpreters, Certification Commission for Health Care Interpreters, National Board of Certification for Medical Interpreters, National Interpreter Certification, or Center for the Assessment of Sign Language Interpretation.

      In addition, of interest are recent amendments to SB 997 (Borgeas), which would make AB 5 prospective in application. SB 997 basically does three things:

1. Makes numerous technical changes to Labor Code Section 2750.3, which is AB 5.
2. Amends subdivision (i)(1) related to the effective date. Current law provides that the codification of the ABC Test in subdivision (a) does not constitute a change in, but is declaratory of existing law, as it relates to the Industrial Welfare Commission’s Wage Orders and violations of the Labor Code related to wage orders. This bill strikes that provision and instead specifies that the provisions of this section apply only to work that was performed after the Dynamex decision was adopted, which is May 1, 2018.
3. Deletes subdivision (i)(3). Current law provides that, with two exceptions, this section of the Labor Code applies to work performed after January 1, 2020.

      When the Legislature reconvenes on Monday, May 4, we will have to see whether either of these bills, as well as the over thirty other bills proposing amendments to AB 5, are considered by the Assembly and Senate.