The Referral Agency Exception To California’s Strict Independent Contractor Definition
When new Labor Code section 2750.3(g) goes into effect on January 1, 2020 as part of Assembly Bill (AB) 5, certain types of referral agencies may be able to avoid classifying associated service providers as employees under the uber-strict Dynamex ABC standards. See, California’s Independent Contractors (October 2019).
Only referral agencies that deal in specified industries are eligible: those connecting clients or customers with service providers dealing in graphic and/or web design, photography, tutoring, event planning, minor home repair, furniture assembly, picture hanging, moving, errands, home cleaning, animal services, dog walking or grooming, pool cleaning or yard cleanup.
Such associated service providers must be either a sole proprietorship, corporation, partnership, limited liability company or limited liability partnership.
Additionally – and keeping with the previously prevailing “Borello” multi-factor balancing test for contractor vs. employee classification — the service provider must:
November 8, 2019Back to Blog
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