Has AB5 affected you yet?
Earlier today, I had a call from the HR director at one of the colleges where I teach one night a week. She called to tell me that I can no longer be classified as an independent contractor, and that under California's new law, AB5, I must be treated as an employee.
OK. No big deal for me. I don't really mind. And the college doesn't either, because they're a big operation and run a significant payroll. Although it does cost them a little bit more to treat me this way, it's not much in the overall scheme of things.
But for smaller businesses and freelancers, this classification question can be a big deal. Some have estimated that having an employee costs as much as 30% more than using the same worker as an independent contractor. They can't really pass all of that cost along to the employee, by lowering the base rate of pay, so it hits them in the wallet.
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