California Assembly Bill 5 has passed and is being sent to Governor Gavin Newsome for his signature. AB 5 codifies the decision of the California Supreme Court in the Dynamex Operations West, Inc. v. Superior Court of Los Angeles regarding employee classification. The three-prong A, B, C test will apply, with the exception of certain industries that are exempt within the bill.
The good news, thanks in large part to the work of the California Aesthetic Alliance, is that exempt professions now include licensed barbers, cosmetologists, estheticians, electrologists and manicurists.
However, individuals in these industries must:
- Set their own rates, process their own payments and be paid directly by clients
- Set their own hours of work, with sole discretion to decide the number of clients as well as to whom they will provide services
- Have their own book of business and schedule their own appointments
- Maintain their own business license for the services offered to clients
Additionally, if the individual is performing services at the location of the hiring entity, then the individual must issue a Form 1099 to the spa or business owner where they rent their space.
On its Facebook page on September 7, the California Aesthetic Alliance praised the revised legislation with a post reading: “Today’s (proposed) law as amended now INCLUDES licensed manicurists (and estheticians of course!) because we voiced our opinions and reasoned arguments. Jaime Schrabeck and Wendy Jacobs Cochran deserve extra credit for making this legislation their first priority, investing considerable resources to ensure that licensed beauty pros in California receive equal and fair treatment under the law. Thanks to all who asked questions, and especially to those who shared the news and made the effort to contact their state legislators. You can keep sharing and contact those same legislators to express your opinion on this version. (WE STRONGLY support.) The process will go quickly from here as the California legislature (Senate) has until September 13 to pass the bill. After the bill is signed by Governor Newsom (as expected) and goes into effect January 1, 2020, we need to prove that we’re worthy of the exemption!”
