Assembly Bill 5 (AB5)

Assembly Bill 5 (AB5), enacted in California in 2019, aims to clarify whether workers are classified as employees or independent contractors. It presumes workers are employees unless employers can prove they meet a strict test (the ABC test), which requires showing the worker is primarily economically independent, performs work outside the company’s core business, and is free from the company's control. The law impacts gig economy workers, freelancers, and independent contractors, aiming to ensure proper benefits, protections, and wages for workers classified as employees. However, it has also faced criticism for limiting flexibility for independent workers.