Update on Dynamex

Possible codification through Assembly Bill No. 5

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The new standard on worker classification in California, instituted by Dynamex Operations West, Inc. v. The Superior Court of Los Angeles (previously reported) continues to develop. Here’s the latest:

  • First, The California Supreme Court is expected to issue a decision on retroactivity of the Dynamex decision, prompted by the Ninth Circuit’s recent announcement on July 22, 2019 that it would withdraw its decision in Vasquez, et al. v. Jan-Pro Franchising International, Inc., in which it held that Dynamex was retroactive.
  • Second, Assembly Bill No. 5 (AB-5), is pending through the California State Senate, with a September 13th deadline, and is expected to codify some of Dynamex. AB-5 is still in progress and subject to modification, but the recent draft includes a statutory exemption for licensed insurance agents, certain licensed health care professionals, registered securities dealers or investment advisers, direct salespersons, real estate licensees, workers providing hairstyling or barbering services, electrologists, and estheticians, as some examples.

Please watch for further updates from us on this rapidly-developing topic, and in the meantime, businesses can benefit from consulting with legal professionals to assess any risks in retaining independent contractors.