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Policy Update: Current Trends in California Employment Law

Posted By Victor Hertz, Monday, October 15, 2018

On my recent trip to Sacramento, California, I recently met with the Chief Justice of the California Supreme Court as well as attorneys specializing in employment law in the post-Dynamex environment (Dynamex Operations West, Inc. v. Superior Court of Los Angeles, No. S222732 [Cal. Sup. Ct. Apr. 30, 2018]). While it would be inappropriate of me to delve into the legal issues that were raised, I want to share with you some of the general discussion and thoughts on what is to be done. 

How the California Legal System Operates 

No one knows how the new ABC test incorporated within the Dynamex decision will be applied in any industry, let alone ours. One of the questions raised was, "How do you treat an independent contractor who works for multiple companies?" The current thinking is that work for multiple employers, though it was not directly addressed in the Dynamex decision, would not be perceived as a bar to reclassification. 

A second question: "Would the fact that an independent contractor worked only a few hours per month or per year preclude them from being reclassified as an employee?" The consensus answer was no. An independent contractor who would otherwise qualify as an employee—for a few hours or a few thousand hours—would be treated the same. 

A third question: "Would the department of labor and other agencies of the state government utilize the same test for classification?" The answer is that each state agency would be free to utilize its own evaluative procedure in reaching a judgment on whether or not an independent contractor should be reclassified as an employee.

These questions, and others, are expected to be decided at the administrative level or, ideally, in the California state legislature. Interestingly, the current legislature decided there was insufficient time this year to address these complex issues. This was seen as a euphemism for “too hot to handle in an election year.” While some saw this delay as a plus, it may actually prove to be a negative in the larger political context of California. 

State Politics

The ultimate fallout from the Dynamex decision will depend on the political environment. In 2019, the California State Legislature will likely be significantly more favorable to labor unions and, by extension, less favorable to business. 

Moreover, and perhaps more significantly, the new governor, who will likely be a Democrat, will undoubtedly be less conservative than the current Democratic governor, Jerry Brown, who has reached his term limit. The net result of this political change will be a state political environment that is not likely to provide broad protection from the Dynamex decision.

There is another wrinkle to the politics of the Dynamex decision. The decision, and others like it, will most likely wind up before the U.S. Supreme Court. My understanding is that the Dynamex decision will be appealed. In the context of the new composition of the court, it is likely that the Dynamex decision will be modified, if not overturned.

Another area of political uncertainty in 2019 and beyond is that there will be one or more proposals put on the California ballot to either enact or overturn the Dynamex decision. This may result in an amendment to the California State Constitution to protect the gig economy and put it out of reach of judicial decision. 

Lobby for Safe Harbor

ALC needs to organize a lobbying effort of its own to carve out a safe harbor for interpreting, translation, and related disciplines within the language services industry. We cannot rely on a business coalition to salvage our relatively small corner of the independent contractor market. 

There are now multiple states that are either judicially or legislatively following a similar pathway to reclassification of independent contractors. States mentioned in the meeting include, but are not limited to, Arizona, Illinois, Massachusetts, Rhode Island, and Vermont. Reclassification is not a California-specific problem; it's an industry-wide problem. And, it is one that will not be solved by individual action. I respectfully suggest that ALC be reconstituted to allow for active lobbying, and that we all reach into our pockets to fund a national lobbying effort.

Victor Hertz is president of Accredited Language Services. He can be reached at vhertz@accreditedlanguage.com. Follow him on Twitter @VictoratALS.

 

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