Skip to content
Go to News

New California Labor Law May Affect Organic Businesses

by Noah Lakritz |

A newly implemented law will change the classification for many workers in California from independent contractors to employees. Assembly Bill 5, which Governor Newsom signed into law on September 2019, codifies the California Supreme Court’s Dynamex decision into state law. The Dynamex decision outlines a three-part “test” to determine a worker’s employment classification. According to the new law, a worker can only be considered an independent contractor if all three of the following conditions are met:

                   (A) The individual is free from control and direction in connection with the performance of the service, both under                           his contract for the performance of service and in fact; and

                   (B) The service is performed outside the usual course of the business of the employer; and

                   (C) The individual is customarily engaged in an independently established trade, occupation, profession or                                     business of the same nature as that involved in the service performed.

If a worker does not meet these conditions, they must be classified as employees. While exemptions for certain worker classifications were included in AB 5, none were agricultural. To learn more about the law and how it may affect your business, visit the Labor and Workforce Development Agency’s employment status website.