California lawmakers passed Assembly Bill (AB) 5 on May 29. If it ultimately makes it past the Senate and gets signed off on by the governor, then the way that workers are classified in the state may change. This may have a significant impact on who is eligible to receive workers’ compensation benefits.
A report published by the Federal Reserve earlier this year shows that many who work in the gig economy struggled to support themselves financially in 2018 compared to bona fide employees at companies.
They determined that this likely has to do with a combination of factors. Some of those include that these workers not being paid a set minimum wage, not being protected by state labor codes or provided with health insurance. They found that gig workers often struggle financially because they’re not afforded workers’ compensation benefits or unemployment insurance.
A Supreme Court ruling in the case Dynamex Operations West Inc. v. Superior Court of Los Angeles in April made it easier for workers to be classified. It comes down to how an employer performs when subjected to the ABC test.
The A factor that regulators look at has to do with control. A worker can only be considered as an independent contractor (IC) if a company has no direct control over how a work product is carried out. The B factor is related to scope. An individual must be asked to complete tasks in a different field from the hiring company to be classified as an IC. C stands for independence. A worker who runs a business in the same field as the hiring company may work as an IC.
There are certain types of workers that are excluded from being covered by AB5. The bill is expected to go up in front of California senators in July. Proponents of the bill are proposing instituting fines and other penalties for any employer that misclassifies workers once this legislation passes.
Workers’ compensation coverage ensures that those hurt on the job in Torrance receive necessary medical care and compensation for lost wages for the time that they miss at work. As the law currently stands, only those who are classified as employees qualify for these benefits. Independent contractors do not.
If you’ve been told that you are ineligible to receive these benefits, then a workers’ compensation attorney can verify if this is due to your employment status.