A California Senate labor committee is reviewing a bill that could narrow the definition of an independent contractor and limit its use in the state’s construction industry, according to www.constructiondive.com. The state assembly approved the measure at the end of May.
If enacted, California employers would be required to use the ABC test to determine whether a worker is an independent contractor or an employee entitled to the protections and benefits that come with that status. Under the three-part ABC test, workers can only be classified as independent contractors if they perform their work free from the control and direction of the employer; offer services outside the hiring contractor’s normal scope of work; and typically work as part of a business.
The California assembly added exceptions for certain professions to the proposed measure before it went to the state senate. Professions such as engineers, architects and real estate licensees would be exempt from the new law.
According to a report from Material Handling & Logistics, some business groups are putting pressure on the state senate to add more exceptions to the measure before voting.
Unscrupulous employers sometimes classify workers as independent contractors instead of employees to avoid paying them a fair wage, paying payroll taxes on their behalf and being forced to provide health insurance or workers’ compensation coverage.
The proposed measure continues a trend in California and some other states of broadening worker protections. For example, a new California law took effect Jan. 1, 2018, that makes general contractors ultimately responsible for payment of wages to their subcontractors’ employees. California also has taken action against those who commit wage theft or otherwise mistreat or cheat workers.
