August 29, 2019 – San Diego, CA. — News headlines on California’s pending legislation bill AB5 has many people in the gig-economy talking about this controversial bill, mostly Uber, Lyft and GrubHub drivers, however there is another large industry that will be affected by this bill, gentlemen’s clubs and strip clubs.
This California state law proposes and defines how to classify workers as either independent contractors or employees could lead to economic chaos according to some legal experts. This bill was introduced by Assembly Member Gonzalez of San Diego, CA.
AB5 would transform an estimated 2 million workers from independent contractors to employees.
What does AB5 do?
AB5 is based on the California Supreme Court’s Dynamex decision, which means a so-called “ABC” test will be used to determine if a person is an independent contractor or not. To keep someone as such, an employer must prove that the person is:
- free from company control;
- performs work not central to the company’s business; and
- has an independent business in their industry.
If they employer meets all three of those parameters, the worker can be classified as an independent contractor. That’s a very tough test, which, experts says, most “gig”-economy employers will not pass.
Here is the excerpt from the actual bill’s overview, link source below.
An act to amend Section 7500.2 of the Business and Professions Code, to amend Section 3351 of, and to add Section 2750.3 to, the Labor Code, and to amend Section 621.5 of the Unemployment Insurance Code, relating to employment, and making an appropriation therefor.
LEGISLATIVE COUNSEL’S DIGEST
Existing law, as established in the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission. Existing law requires a 3-part test, commonly known as the “ABC” test, to establish that a worker is an independent contractor for those purposes.
Existing law, for purposes of unemployment insurance provisions, requires employers to make contributions with respect to unemployment insurance and disability insurance from the wages paid to their employees. Existing law defines “employee” for those purposes to include, among other individuals,
any officer of a corporation, and any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee. employee, or is an employee of a person who holds or is required to obtain a valid state contractor’s license.
This bill would state the intent of the Legislature to codify the decision in the Dynamex case and clarify its application. The bill would provide that the factors of the “ABC” test be applied in order to determine the status of a worker as an employee or independent contractor for all provisions of the Labor Code and the Unemployment Insurance Code,
unless another definition or specification of “employee” is provided. except if a statutory exemption from employment status or from a particular obligation related to employment or where a statutory grant of employment status or a particular right related to employment applies. The bill would exempt specified professions from these provisions and instead provide that the employment relationship test for those professions shall be governed by the test adopted in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 if certain requirements are met. These exempt professions would include, among others, licensed insurance agents, certain licensed health care professionals, registered securities broker-dealers or investment advisers, a direct sales salesperson, salespersons, real estate licensees, workers providing hairstyling or barbering services, electrologists, estheticians, workers providing natural hair braiding, licensed repossession agencies who meet requirements described below, and those performing work under a contract for professional services. The bill would require the State Board of Barbering and Cosmetology to promulgate regulations for the development of a booth rental permit and a reasonable biennial fee upon workers providing specified hairstyling or barbering services, by no later than July 1, 2021. services, with another business entity, or pursuant to a subcontract in the construction industry.
This bill would also expand the definition of employee, for purposes of unemployment insurance provisions, to include individuals who are defined as employees pursuant to the above-described provision of the Labor Code codifying the “ABC” test. Because this bill would
expand increase the categories of individuals eligible to receive benefits from, and thus would result in additional moneys being deposited into, the Unemployment Fund, a continuously appropriated fund, the bill would make an appropriation. The bill would state that addition of the provision to the Labor Code does not constitute a change in, but is declaratory of, existing law with regard to violations of the Labor Code relating to wage orders of the Industrial Welfare Commission.
Existing provisions of the Labor Code make it a crime for an employer to violate specified provisions of law with regard to an employee. The Unemployment Insurance Code also makes it a crime to violate specified provisions of law with regard to benefits and payments.
By expanding the definition of an employee for purposes of these provisions, the bill would expand the definition of a
crime. crime, thereby imposing a state-mandated local program.
Existing law, the Collateral Recovery Act, provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services. Existing law defines a repossession agency to include any person who engages in the business or accepts employment to locate or recover collateral. Existing law permits a licensed repossession agency to only transact business with another person or entity as an independent contractor.
This bill, to ensure that independent contractor status is met, would require the repossession agency to be both free from the control and direction of the hiring person or entity, as specified, and perform work that is outside the usual course of the hiring person or entity’s business.
Are strippers, topless dancers or exotic dancers an “employee” or “independent contractor”?
Many clubs today will often seek to categorize the dancers as “independent contractors” rather than employees. This tactic allows these clubs to avoid following the rules set by the Fair Labor Standards Act, known as FLSA laws.
However, gentlemen’s clubs or stripper bars can’t just state that a dancer is an independent contractor and make it true – certain legal requirements must be met; otherwise, the dancer is actually an employee. We understand the FLSA laws in every state, and strip club owners and operators must adhere to these laws. Read more on Strip Club misclassification lawsuits here.
Exotic Dancers and Strippers Unite to Fight Unfair Club Practices.
Many women in the exotic dancing industry are learning about their rights in working for strip clubs. The movement seems to have started in New York City and has spurred the hash tags #NYCStripperStrike and #Stripperpride.
While researching data for this page we found a remarkable story of one New York City based dancer on Huffington Post.
She details the way it works in these strip clubs and tells accounts of “brutal transactions and crude discriminatory policies”. Full story here: https://www.huffingtonpost.com/entry/nyc-stripper-strike_us_5a73880fe4b01ce33eb11c88
Other stories of dancers being abused were highlighted in one of our blog posts here. https://www.nationalinjuryhelp.com/category-one/dancer-abuse-strip-clubs/
Exotic Dancers & Strippers Have Rights under AB5!
If you are, or were an exotic or topless or full nude dancer and have experienced unfair pay we can help you regain your dignity and pay that may have been taken illegally from you. You have rights to sue the club’s owner(s) or corporation.
The first step in joining the Stripper individual employment lawsuit is to simply call us at 1-800-214-1010, or use the contact form on this page. The lawyers and attorneys at National Injury Help are ready to file these claims. Take action now and protect your rights!