The GigReporter

Over the past few years several states and municipalities have introduced new laws governing the hiring of individual independent contractors, and California is the latest to join in, with the Freelance Worker Protection Act (FWPA) having been signed into law in September. Adding California Business & Professions Code Sections 18100 et seq., the law will go into effect on January 1 next year.[1] However, this California law is limited in an important respect compared to other jurisdictions’ versions, which means that it will not affect owner/operators engaged by logistics brokers.

The FWPA applies to hiring parties that hire freelance workers to provide “professional services”, a term cross-referenced to Section 2778(b)(2) of the California Labor Code. If you have been following SCI’s coverage of litigation over the AB5 litigation you will already be aware that this recent California law, which imposes a strict ABC test for independent contractor status, exempts numerous types of service, leaving them to be governed by an older, more lenient standard. Labor Code Section 2778 is where those AB5 exemptions are codified. Effectively, this means the FWPA only applies to those services exempt from AB5 and subject to the less restrictive independent contractor test.

Section 2778’s list of “professional services”, while numerous, are far from universal, and do not include any transportation services. This is not surprising, as app-based ridesharing and delivery companies were major intended targets of AB5; transportation is unlikely to ever be added to the list of exempt professional services. The California legislature isn’t going to give logistics brokers a break on the ABC test for owner/operators, but at least those brokers will not be subject to FWPA compliance either.