ARTICLE
3 September 2019

AB 5 Update: California Senate Committee Advances Bill To The Senate Floor

LM
Littler Mendelson

Contributor

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This article is an update to prior publications from Littler's Workplace Policy Institute regarding Assembly Bill 5 (AB 5), currently pending in the California legislature.
United States Employment and HR
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This article is an update to prior publications from Littler's Workplace Policy Institute regarding Assembly Bill 5 (AB 5), currently pending in the California legislature.

On August 30, 2019, the California Senate Appropriations Committee briefly considered AB 5, the legislature's response to the California Supreme Court's 2018 opinion in Dynamex v. Superior Court (Dynamex). In Dynamex, the court changed the state's longstanding law governing worker classification and exposed thousands of California businesses to potential retroactive liability.

AB 5 previously came before the Senate Appropriations Committee on August 12, 2019, when the Committee temporarily put the bill on hold. The Committee has now voted the bill to the Senate floor.

The Appropriations Committee heard no testimony or public comment regarding the bill. Only Committee Chair Portantino spoke very briefly on the subject, stating:

[AB 5] is out with amendments to refine the operation of the ABC test, modify the industrial categories under the Borello test, and make clarifying changes. ... That bill is approved on a five to two vote.1

Chair Portanino's brief statement is the first official confirmation that the bill is undergoing further revision.

Assemblymember Gonzalez first introduced AB 5 on December 3, 2018. The initial bill included an expression of intent to "include provisions that would codify [Dynamex] ... and would clarify the decision's application in state law." The substantive portion of the bill was 34 words (not including the citation to the Dynamex opinion). There have been four major revisions since then. The current version, published July 11, 2019, contains approximately 2,500 words.

In the weeks after the August 12, 2019 hearing, legislators have reportedly been working behind closed doors to make one more major revision to the bill. None of the information regarding that process is publicly available.

This revision is likely the final opportunity for interested parties to provide input on the bill. There will be virtually no time for further debate and subsequent revisions. The legislature has only 10 business days (including August 30, 2019) to pass the bill before the legislative session ends on September 13, 2019.

Due to this time pressure, legislators will have to choose between advancing the revised bill or facing potential criticism for failing to pass any legislative "fix" to Dynamex during the current session. It is expected that some legislators who believe changes should be made to the bill may nonetheless vote to pass it this session with the belief that additional changes will be made through separate legislative efforts in the next session.

In the face of growing uncertainty, some employers are eyeing a possible 2020 ballot initiative to advance an AB 5 countermeasure. For now, employers across the country are anxiously awaiting publication of the amended version of AB 5, which is expected to be published after Labor Day.

WPI will continue to monitor and report on AB 5 developments.

Footnotes

1. Yea: Portantino, Bradford, Durazo, Hill, Wieckowski. Noe: Bates, Jones.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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