This report examines the impact of California's new AB 5 law on independent contractors. Under the ABC test, a business can only contract with a worker as an independent contractor if the work performed is under the worker's control, not the business's, is not part of the company's core business, and is part of the worker's independent profession. AB 5 codifies the ABC test in state law and extends its use beyond the wage orders covered in the Dynamex case to unemployment insurance and the labor code, including workers compensation. The report estimates that the law will affect a significant portion of California's independent contractors, including those in occupations such as janitors, hair stylists, and accountants.
