On September 4, 2020, Governor Newsom signed AB 2257 which repealed Labor Code section 2750.3, the main part of prior AB 5, and created new Labor Code sections 2775-85. The new labor codes expanded the list of conditional exemptions established by AB 5 by adding more than twenty new conditionally exempt occupations. These changes took effect immediately upon passage and now make it easier for several categories of professions to work as independent contractors if certain conditions are met.
The law as established by AB 5 remains unchanged in that AB 2257 still requires that anyone performing labor or services for pay be considered an employee unless the hiring entity can satisfy the ABC test. Under AB 2257, all occupations that do not qualify as “conditionally exempt” are subject to the “ABC Test”. If “conditionally exempt,” the previous “Borello Test” applies in order to determine the employment status.
We have updated our Employment Status Resource Center on StateFundCA.com to reflect the changes made by AB 2257. The Resource Center is a useful tool for you and your clients to understand AB 5 and its effects to ensure that accurate payroll is being reported. State Fund is also offering a free webinar on this topic, and we encourage you and your clients to watch our updated AB 5 Employer Education Webinar.
If you have additional questions, you may also contact your State Fund marketing representative or underwriter, or call our customer service center at (888) 782-8338.