• ITA Team

Have you heard about the California AB5 bill?

Things are changing for the Independent Contractors in California on January 1 2020. This new California law is limiting the use of independent contractors and making employers show that the IC or employee is classified correctly. There are three conditions that they must meet in order to “classify’ them.

1-the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact

2-the worker performs work that is outside the usual course of the hiring entity's business

3-the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity(1)

Therapists enjoy working in the field as Independent Contractors and this right would be taken away as they will be forced to sign on as employees of the companies taking away their flexibility, ease of options to work in multiple settings and specialties.

CPTA in California is continuing to urge exceptions for therapists in the field but it has not yet happened. The best thing you can do is stay informed. Many companies out there that hire therapists to be ICs may not want to take the risk and will stop using this model. If this happens CPTA urges therapists to report the issues to lawmakers. The CPTA is continuing to fight saying that healthcare should be left out of this law.

This is not just a therapist issue though note that this is affecting all lines of IC work from freelance writers, to Uber drivers, etc. This is forcing some people to decide if they even want to stay in California if their jobs as ICs is better served in other areas. Some professions in the healthcare field not affected are doctors, surgeons, dentists, veterinarians, and psychologists.

Ipse wrote a great blog which you can read that states: “What would happen if AB5 was passed nationwide”. https://www.ipse.us/post/what-would-happen-if-ab-5-was-passed-nationwide To summarize this read- $1.5 trillion is generated by Independent Workers in 2018 and that means that would dramatically decrease and companies would be absorbing IC workers as employees. Healthcare and education services make up $102.9 billion of this industry for the nation. That is a lot of absorption to agencies working with therapists.

To summarize, be aware of the changes in the IC world. We support the IC worker and the right to be your own business, make your own decisions on healthcare, hours, wage, and any other decisions you have as being your own boss. Be aware of the laws and changes but reach out to the advocacy groups on these issues.

References:

https://en.wikipedia.org/wiki/California_Labor_Code

https://www.ccapta.org/general/custom.asp?page=AB5

https://www.ipse.us/post/what-would-happen-if-ab-5-was-passed-nationwide


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