GOP leadership challenges state gig-worker with spate of new bills

Pushback against Assembly Bill 5 struck a “particularly partisan” chord when Republican legislators introduced a bill to repeal and replace the controversial employee classification law in the legislative session, according to an employment attorney who said, in her experience, such repeal efforts are rare.

SB 806 was the top item in a legislative package presented last week by state Senate Republican Leader Shannon Grove and members of the California Senate Republican Caucus. The remaining bills in the package provide exemptions to AB 5 for workers in specific industries, including freelance journalists, licensed pharmacists, musicians, and app-based drivers.

“I’m not a legislative expert, but I obviously follow the employment laws,” Kate Gold, a partner in the labor and employment law department at Proskauer said in an interview Friday. “We were trying to think about whether we had seen some counter legislation to repeal existing legislation, and I can’t think of another example of that.”

Kelly Scott, partner and head of the employment law department at Ervin, Cohen, and Jessup, LLP, agreed.

“I can’t even think of other situations where it’s happened in recent years,” he said.

AB 5 automatically classifies workers as employees unless they pass a three-pronged ABC test that would allow them to be recognized as independent contractors.

Authored by Grove, SB 806 would repeal and replace AB 5 by introducing “a substantially modified ABC test ... that is a significantly more broad, flexible and workable test for determining independent contractor status,” said Jacqui Nguyen, a spokesperson for Sen. Grove.

“The new and improved test would require a hiring entity to meet only the A factor (amount of control) and EITHER the B factor (either work done outside the usual course of business or work done outside of the place of hiring entities business) OR the C factor (work in an independently established trade, occupation or business),” Nguyen continued in a Friday email. “Under the new test, the ‘B’ factor is also expanded to allow it to be met in more than one way.”

Although AB 5 already allows exemptions for some workers, including physicians, attorneys, brokers, real estate agents, and commercial fishermen, workers in non-exempted industries have lodged challenges against the law since it took effect Jan. 1, largely via lawsuits.

In addition to the senate bills presented by the State Senate Republican Caucus last week, Republican assemblymembers have introduced a spate of assembly bills seeking exemptions for small businesses, pharmacists, transportation network companies, newspaper distributors and carriers, franchisers and franchisees, physical therapists, and more.

Last September, members of the caucus tried to amend AB 5 during the legislative session to provide exemptions to some of these workers, including newspaper distributors and carriers and physical therapists. However, they were blocked by state Democrats, the caucus said.

“There are so many exemptions already for occupations that there’s a strong chance these other exemptions could pass,” Gold said, but those odds likely won’t extend to the repeal and replace bill.

“They’re not going to have the votes to repeal the law entirely,” she said, noting the same legislature that approved AB 5 is still in place.

Scott said he is not surprised by the pushback against the law.

“AB 5 is exceedingly complex and is very difficult for businesses to follow,” he said. As an example, he referenced small businesses whose exemption to AB 5 is proposed by one of the Republican assembly bills. Under the classification law, employers have to check the business licenses of all its contractors. But small businesses often don’t have the bandwidth to do that, Scott said.

“I think it’s a difficult situation,” he said. ”It’s going to take a while to get this cleaned up.”