What you need to know about how new CA legislation AB 5 may affect your business.

On September 10th, the California legislature passed Assembly Bill 5 (AB 5) which essentially codified last year’s state Supreme Court ruling in Dynamex Operations West, Inc. v. Superior Court of Los Angeles.

Dynamex established a test for determining whether a worker in California is an employee or an independent contractor.

What does this mean for your business? Why do the distinctions matter?

In short, what benefits and workers’ compensation a business is required to provide to those it hires turns on whether the person hired is an independent contractor or an employee.