AB 5 ‘Fix:’ New Exemptions Added to California’s Independent Contractor Law –
As many are aware, Assembly Bill 2257, by Assemblywoman Lorena Gonzalez (D-San Diego), was signed by Governor Gavin Newsom on September 4 as Chapter 38. As an urgency measure, the statute took effect immediately.
AB 2257 repealed Labor Code Section 2750.3, which was added to the Code by last year’s Assembly Bill 5. Instead, AB 2257 added Article 1.5 (commencing with Section 2775) to Chapter 2 of Division 3 of the Labor Code. In addition, AB 2257 amended Sections 17020.12 and 23045.6 and added Sections 18406, 21003.5, and 61001 to the Revenue and Taxation Code.
For those unfamiliar, in 2018, the California Supreme Court unanimously decided the Dynamex case and imposed a new “ABC Test,” which is a 3-part test that must be met in order for a worker to be properly classified as an independent contractor. In 2019, the Legislature adopted and the Governor signed AB 5 by Assembly Gonzalez to codify the ABC Test.
The codification in AB 5 expanded the ABC Test to apply to all purposes under the Labor Code, Unemployment Insurance Code, and IWC Wage Orders. AB 5 also included over fifty categories of workers who were exempted from this 3-prong test and instead subject to the prior Supreme Court decision which established the Borello case multi-factor test.
AB 2257 recast the statutory scheme and added over fifty more exemptions from the ABC Test into the California Labor Code. In addition, the new statute authorizes a district attorney to prosecute an action for injunctive relief.
Last year’s AB 5 had created 57 statutory exemptions from the “ABC Test.” The new referral agency code section as added by AB 2257 includes all workers, but excludes specified ones. In AB 5, this referral agency section listed only certain types of workers who were exempt under this particular exemption. Now, AB 2257 includes all of those workers, except it does not list house cleaning, and then the bill added 5 new types of workers.
Overall, this year’s AB 2257 added 53 new exemptions, for a total of 109 exemptions from the Dynamex decision and its ABC Test. The following are the statutory exemptions contained in AB 2257, set forth in the order in which they appear in the relevant sections of the Labor Code (along with a notation for those that were previously listed in last year’s AB 5):
AB 2257 (Gonzalez) Exemptions from the “ABC Test”
 Bona fide business-to-business contracting relationship – previously contained in AB 5
 Relationship between a referral agency and a service provider
 Graphic design [for referrals] – previously contained in AB 5
 Web design – previously contained in AB 5
 Photography – previously contained in AB 5
 Tutoring – previously contained in AB 5
 Youth sports coaching
 Wedding planning
 event planning – previously contained in AB 5
 Services provided by wedding and event vendors
 Minor home repair – previously contained in AB 5
 Moving – previously contained in AB 5
 Errands – previously contained in AB 5
 Furniture assembly – previously contained in AB 5
 Animal services – previously contained in AB 5
 Dog walking – previously contained in AB 5
 Dog grooming – previously contained in AB 5
 Picture hanging – previously contained in AB 5
 Pool cleaning – previously contained in AB 5
 Yard cleanup – previously contained in AB 5
 Interpreting services