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ALC—Dynamex Update

Posted By Trey Calvin, Tuesday, August 21, 2018

By Trey Calvin, Managing Policy Analyst, JNCL-NCLIS

With the end of California’s 2018 legislative session on August 31, action on Dynamex is expected to fizzle until next January. According to reports, leaders in the Senate and Assembly, Senate President Toni Atkins, and Assembly Speaker Anthony Rendon have given no indication of their willingness to provide a clear path to compliance before the year’s end, leaving an estimated 2 million California workers—and countless business leaders—confused and agitated.

Politically, Dynamex plays well for pro-worker rights groups (i.e., Democrats who traditionally rely on Union votes) in the run up to election season. Democrats hold a supermajority in California, and they are looking to maintain power with this win. However, pro-business groups are highlighting the stories of independent contractors, which has thrown a wrench into a traditionally binary political feud. One of their indispensible data points is that 80% of nationally surveyed independent contractors prefer the flexibility afforded by working for themselves.

Coverage of the issue has been confined to California’s relatively strict interpretation of the ABC test. However, several other states with strong Democratic legislatures have considered updating their wage order to mirror California’s in 2018. We will continue to provide more updates as they occur.

To reiterate, JNCL’s recommendation is that the government provide one clear path to compliance for businesses. The California legislature can accomplish this by updating its wage orders to clarify that “knowledge-based industries” like the language industry should be exempt from the narrowest of employee classifications. California has the strictest interpretations of the ABC rule, which is why lawmakers should expand the “B factor” to include an “or” to allow workers to perform a similar function as the hiring company’s “usual course” of business if it is in a different location:

  • Current “ABC” language: (B) The work they perform falls “outside the usual course” of the hiring company’s business
  • Recommended “ABC” language: (B) The work they perform is either: a) outside the usual course of the hiring entity’s business; or b) outside all the places of business of the entity

In California, JNCL has reached out to the I’m Independent Coalition and the California Chamber of Commerce to see how we might work together to share our story. We are also reaching out to the Sacramento Bee to include the language industry in upcoming coverage. On Capitol Hill, we continue to meet and rely our message to key offices.

 

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