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Everything You Need to Know About California’s AB 5 Gig-Worker Law

  • Published: July 9, 2023

The California Assembly Bill 5 (AB5), also known as the gig worker bill, has dramatically changed the longstanding regulations surrounding how an employer will determine whether their worker is an independent contractor or an employee. The law became effective January 1, 2020, and reclassified millions of workers in the state as employees.

In the past, the California Supreme Court used the three-pronged “ABC Test” to determine a worker’s classification in wage-order claims. However, now under AB5, the “ABC Test” was expanded to cover the entire Labor Code and Unemployment Insurance Code. If you were injured while working and you are not sure how the AB5 gig-workers law affects you, or you want to know whether you can pursue a workers’ compensation claim, consider partnering with an experienced workers’ compensation attorney who can help you fight for your rights and go after the money you are entitled to.

What You Should Know About the California Assembly Bill 5 (AB5)

The California Assembly Bill 5 (AB5) is legislation signed into law by Governor Gavin Newsom in September 2019. This law mandates that companies who hire independent contractors may need to reclassify them as employees. However, this law only applies to workers in California, irrespective of where the employer is based. In addition, the law does not apply to workers outside of California, even if the employer is based in California. 

Yet, while the law may make it more confusing for employers to label their workers, it does create a more level playing field between those working in the gig economy and those hired as regular employees. This is because AB5 can provide employees in California with benefits they were never afforded. For instance, independent contractors in California are not entitled to most benefits and protections that other employees in the state get, such as:

  • A minimum wage and overtime pay
  • Workers’ compensation and unemployment insurance
  • Paid family leave

Under this law, if an employer classifies a gig worker as an employee, the worker is entitled to expense reimbursements, rest breaks, health insurance, minimum wage, and numerous other benefits that have only been provided to covered employees. 

The New “ABC Test”

Under AB5, the “ABC Test” will be used to determine if a non-exempt worker in California is an independent contractor or an employee for employment law purposes. Under this test, every worker is presumed to be an employee unless the individual satisfies the new prongs of the “ABC Test.” Only then will they be labeled as an independent contractor.

According to the new laws, a worker can be called an independent contractor if:

  • The worker is free from the direction and control of the hiring entity in doing their work, according to both the contact between the parties and in reality
  • The worker performs work that is outside the hiring entity’s usual course of work
  • The worker is usually engaged in an independently established occupation, business, or trade that relates to the work they are now doing

However, for a non-exempt worker to pass this test and be labeled an independent contractor, the worker must meet all three prongs. 

Does California’s AB5 Gig-Worker Law Impact Workers’ Compensation Benefits?

California’s AB5 offers workers more labor protections, including workers’ compensation benefits. A workers’ compensation insurance policy provides covered employees with wage and medical replacement benefits that come up due to workplace injuries. 

However, because California is a no-fault workers’ compensation state, both the employer and the employee benefit. As an employee, the policy covers the costs of their medical treatments, including doctor visits, surgeries, and other expenses related to the medical treatments they need as a result of their injuries. Additionally, workers’ compensation also provides indemnity benefits, which are calculated based on an injured worker’s weekly wages. However, in return, the employee is not allowed to sue their employer for compensation related to the injuries they sustained.

What’s more, to receive these benefits, the employee will not have to prove that their employer was at fault for the injuries they sustained or somehow caused the accident. Rather, the only thing the employee needs to establish is that they were harmed while working. 

While the concept of workers’ compensation may appear to be relatively straightforward, securing the money you need after a workplace accident is not always that easy. In fact, most workers’ compensation cases in California require the assistance of a skilled workers’ compensation attorney. This is because these experienced legal professionals can help you figure out not only whether you qualify for workers’ compensation according to California’s new AB5 gig-worker law but they can also assist you in fighting for every last dollar you deserve for the injuries and losses you suffered because of the work-related accident. 

Contact KCNS Law Group to Learn More About How California’s AB5 Gig-Worker Law Can Impact Your Workers’ Compensation Claim

If you have been injured on the job, even as a gig worker in California, and believe you are entitled to workers’ compensation benefits, contact KCNS Law Group today to review your accident and determine your legal options.

At KCNS Law Group, our lawyers have over 40 years of combined experience in workers’ compensation claims, as well as personal injury cases. We have helped countless clients and secured significant compensation on their behalf. If you are looking for dedicated and skilled legal help to assist you with your workers’ compensation claim in California or need more information regarding the new AB5 law, give us a call today at (818) 937-9255 or complete our contact form.

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