When Assembly Bill 5 (AB 5) went into effect January 1, 2020, it significantly altered the way California law distinguished between employees and independent contractors, making the "ABC test" the general rule in most circumstances, but also creating several exceptions in which the common law classification test applies.
Early in the 2020 legislative session, shortly after AB 5 went into effect, the California Legislature introduced roughly 30 bills seeking to either amend or repeal AB 5 — and over the course of the session, that number dropped to one. Assembly Bill 2257 (AB 2257) was the only bill left standing, and Governor Gavin Newsom signed it into law on September 4, 2020. Because the bill was designated as urgent, it went into effect immediately upon signing.
AB 2257 doesn’t change the basic framework established by AB 5, but it revises and clarifies existing provisions and creates additional industry exceptions to the ABC test.
Given the significant changes to the independent contractor landscape in California, it's important for employers to understand both standards and when each applies.
Download CalChamber's free Roadmap to California's Worker Classification Law white paper to better understand the independent contractor classification and help you comply with this California law.
Published October 8, 2020
