Worker alleges law deprives him of 'vested right' to reimbursement for business expenses
In a recent case, the California Court of Appeal for the Second District covered the legislative and judiciary landscape of the law governing the distinction between employees and independent contractors.
The earlier case of Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 provided the “ABC test.” Under this test, a court would consider a worker an employee under the wage order unless the company satisfied factors identified as parts A, B, and C.
Read more: Real estate agent: employee or independent contractor?
Assembly Bill 5, passed in 2019 and effective in 2020, codified the ABC test in a statute. The bill broadened the Dynamex ruling by extending its reach beyond wage orders and by empowering prosecutors to enforce the rule, but also narrowed it by creating exceptions to the ABC test. The legislature then enacted Assembly Bills 170 and 2257, which added exceptions to the ABC test.
Section 2775 of California’s Labor Code provided that the ABC test in Dynamex would govern the Code. Section 2783, which identified exceptions to applying the ABC test, provided that the “common law control test” in the case of S. G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341, 349–360 would govern certain occupations.
One exempted occupation related to securities broker-dealers or investment advisers or their agents and representatives registered...
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