As the Year 2020 begins, the Cam Modeling Industry is already feeling the profound impact brought on with the new California AB5 law.
If you are not familiar with AB5 which falls under Section 2750.3 of California Labor Code, let me enlighten you.
AB5 is an extension of clarification of California’s 2018 Supreme Court case, Dynamex Operations West, Inc. vs. Superior Court of Los Angeles (4 Cal.5th 903).
The Dynamex case held that there is a general presumption that most workers are indeed employees, and should be classified as such. The case placed the burden of proof for hiring entities to classify individuals as independent contractors under what is known as the ABC test. The ruling and the newly signed bill require businesses to use the ABC test in determining whether a worker is an employee or an independent contractor.
Under the ABC test, for a worker to be classified as an independent contractor a hiring entity must first prove the following:
(A) The worker is free from the control and direction of the hire in connection with the performance of the work, practically and in the contractual agreement between the parties.
(B) The worker performs work that is outside the usual course of the hiring entity’s business.
(C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity/company.
The law amounts to a stricter, more straightforward standard of proof for companies than what many employment lawyers agree, were vague guidelines within federal law. For most companies, meeting all of the above standards set forth in the ABC test will be challenging, to say the least.
The ABC Test significantly narrows the scope of work for which businesses may classify workers as independent contractors, rather than employees, and expands the application of this new standard to nearly all residents located in California.
Section B of the ABC Test will likely cause the most difficulty for companies that regularly engage independent contractors, such as cam modeling networks.
Section B of the ABC test excludes from the assumption of employee status workers who perform duties outside the “usual course of the hiring entity’s business“. While AB5 does not specifically define the phrase, many businesses use contractors to help them perform their regular business. California courts are expected to be tasked with interpreting the scope of this requirement.
The new law could result in camsites no longer accepting cam model applications from California residents.
Watch for updates of the AB5 law that can potentially end the career of independent cam models, if they are residents of California.
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