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Questions Remain as AB-5 Implementation Takes Shape

Brian German Agri-Business, Regulation

AB-5 implementation

The agriculture community has many questions regarding AB-5 implementation and how that is going to affect common farming practices.  The nature of the farming business makes the application of the new legislation particularly complex.  There is also a lack of clarity thus far as to how exactly the rules dictating independent contractors will be applied.

“There are lots and lots of activities that happen in an agricultural context where you have someone who’s coming in and doing work for you for a day or two, at most.  So how do you handle that?” said Bryan Little, Director of Employment Policy for the California Farm Bureau Federation and COO for the Farm Employers Labor Service. “Some things are going to be a little more clear, like a pesticide applicator or a farm labor contractor; some things are going to be a little fuzzier.”

The new labor law creates a set of parameters for what can be considered an independent contractor and expands on the three-point “ABC test” that was established in the Dynamex case.  One issue of particular concern for the agricultural industry is the rule that an independent contractor can only perform work that is ‘outside the usual course of the hiring entity’s business.’ Little noted that there are “all kinds of things that we do that it’s not really very clear how they’re going to fit under those three prongs and in fact they might not and you might have to make them employees which is not going to be a good outcome for anybody.”

The AB-5 implementation is already resulting in several lawsuits from a multitude of industries.  The legislation was based primarily on the Dynamex decision but was not thoroughly developed to take multiple industries into consideration as to how the rules would be defined or applied. Little noted that unfortunately, the courts are going to need to provide definitive clarity for a number of terms.

“For agriculture, I think that’s liable to be pretty problematic because farmers do a little bit of everything and so what is the usual scope of business for a farm operator? I can’t answer that question yet and unfortunately, the Supreme Court nor the legislature have answered that question either,” said Little.

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Brian German

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Ag News Director, AgNet West