The California assembly on May 29 passed Assembly Bill 5, which would codify the state’s Supreme Court ruling last year adopting a stricter test for independent contractor classification, CNBC reports.
Assembly Bill 5 would essentially write into law standards adopted last year by California’s high court to determine whether workers fall under the classification of an employee or independent contractor. Oregon and Washington have pending bills that propose criteria similar to California’s, according to CNBC.
Oregon’s House Bill 2498, introduced in March, would add to the existing independent contractor classification test that the person in question “does not provide services that are within the usual course of the other person’s business.”
Washington’s proposals, introduced in January in the Senate as Bill 5513 and in the House as Bill 1515, establish seven criteria that must be met to justify independent contractor classification, including that the service must be outside the company’s usual course of business and that the worker be free of control.
A federal appeals court earlier in May ruled California’s ABC test can be applied retroactively.
California’s measure could result in thousands of independent contractors getting classified as employees, affecting employers’ costs from entitlements such as overtime pay and workers’ compensation coverage. The bill has been sent to the state Senate for consideration.