Partner Kamran Mirrafiti was quoted in the Advertising Specialty Institute article, “CA Gig Worker Law May Affect Promo Industry,” about differing options for worker classifications under California Assembly Bill 5, also known as the “gig worker” law.
Mirrafati, who has been fielding questions from clients about AB5, offers a three-pronged approach to the law.
The least risky approach is to reclassify your independent contractors as employees. “If you only have a few workers, it won’t change your whole business model,” Mirrafati said.
The riskier approach is to reconfigure your operations to minimalize liability. Part of the law requires work performed by independent contractors to be unrelated to the main purpose of your company. For example, if you’re a bakery and you hire an electrician to fix your oven, you’re in the clear. But if you bring in contractors to be your cake decorators, those workers would be classified as employees under AB5. “Companies are likely to litigate this particular issue in a lot of detail,” Mirrafati said.
The riskiest approach is to just wait and see. “The risk of a class-action lawsuit is pretty high right now,” Mirrafati said. “There is so much heightened scrutiny on independent contractors, companies are more likely to get hit with a suit and have those arrangements questioned. Judges will be hypercritical because they’re thinking differently. If a contractor was correctly classified five years ago, that arrangement may not be okay now.”