California Assembly Bill 5 was introduced by former state Assemblywoman Lorena Gonzalez, a Democrat, and signed into law in September 2019 by California Gov. Gavin Newsom.
AB5 called for “a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business.”
Certain professions were exempt from AB5, including insurance agents, health care professionals, investment advisers, realtors, barbers, and fishermen. However, truckers were not exempt from AB5.
AB5 targeted independent contractors who were app-based delivery and rideshare drivers. Ironically, companies like Uber, Lyft, and Postmates were exempted from AB5 after Proposition 22 was passed in November 2020.- READ MORE