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Consulting in California – The Rules have Changed
The intent of the new AB 5 law was to codify the California Supreme Court’s Dynamex decision, which aimed to prevent companies from classifying employees as contractors to avoid paying benefits. Members of the “gig economy,” such as drivers for Uber and Lyft, were also supposed to benefit from the law.
However, AB 5 impacts most Californians who work as consultants or independent contractors, including those in the IT fields. If certain conditions are not met, this new law could make it very difficult for many to continue working as independent consultants in California. The heart of AB 5 creates a three-part criteria for determining if someone is an independent contractor. Further, AB 5 provides a list of 12 conditions an entity needs to meet to qualify as a “Business Service Provider” (BSP). All of this is discussed in this IEEE-USA story, and the author of this story (IEEE-USA’s Russ Harrison) will be part of this event’s panel of speakers.
How independent consultants should best deal with AB 5 in order to continue to maintain the independence that they have enjoyed for many years will be a critical aspect of the program. One of the conditions set forth in AB 5 is the need for consultants to advertise their services, and this is an area in which organizations such as PATCA and CNSV provide a very beneficial service by way of each member’s ability to design and maintain a webpage that describes their skillset. This is important not only for meeting this requirement of AB 5, but also for the need of any consultant to promote his or her services to those who may engage them for consulting work.
Brian A. Berg, Russell T. Harrison, Tom Coughlin, Giacomo Vacca, Walt Maclay