Topic: AB5; AB2257; California; Referral Agencies; B2B Relationships; How to Comply with AB5 AB2257

Many independent contractors complained of dire consequences after Assembly Bill 5 (AB5) became effective in California on January 1, 2020. Following intense lobbying and public relations campaigns, independent contractors in 15 industries have now been added to AB5’s list of freelancers who are eligible for an exemption from California’s extraordinarily onerous version of the so-called “ABC” test for independent contractor status. The new version of AB5 is called Assembly Bill 2257 (AB2257). It was signed into law by the Governor of California last Friday, September 4, 2020 and replaces AB5. Except for those fortunate industries and service providers now eligible for exemption from the ABC test, the new law only tweaks AB5 and is essentially unchanged in any meaningful way for the overwhelming number of companies and freelancers doing business in California. But as noted below, there are strategies that can be used by many companies in an effort to comply with AB2257.