Staffing Legal News: Navigating California’s War on Freelancers

“1099 contractors” are now effectively banned from legally performing client staff augmentation work in California; they still may be able to legally perform special project work, but risks exist.

In the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles County, the California Supreme Court rewrote the rules used to determine who is an independent contractor verses an employee. It makes a big difference, of course, when it comes to things like taxes and wages. The new rules, known as the “ABC test,” are quite restrictive, and they make it extremely difficult to legally classify a worker as an independent contractor in California. For good measure, the California Legislature followed up by passing a bill, known as “AB-5,” that enshrines the ABC test into California Law.

It is ironic that the state where the gig economy was born is on a mission to eliminate it. So where does this leave the community of Information Technology freelancers and the companies that hire them?