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December 9, 2024
California Enacts the Freelance Worker Protection Act
California enacted the Freelance Worker Protection Act (FWPA) to provide minimum requirements for contracts between freelance workers and those who hire them. The FWPA becomes effective on January 1, 2025.
In general, a freelance worker is a person who is hired or retained as a bona fide independent contractor by a hiring party[1] to provide professional services in exchange for an amount equal to or greater than $250.
The FWPA will require a hiring party to pay a freelance worker the compensation specified in their contract on or before the date specified in the contract or, if the contract does not specify a date, no later than 30 days after completion of the freelance worker’s services.
The FWPA also will require a contract between a hiring party and a freelance worker to be in writing, and that writing must be provided, either physically or electronically, to the freelance worker. The hiring party must retain the contract for at least four years.
Hiring parties will be prohibited from discriminating or taking adverse action against a freelance worker if the worker seeks to enforce the FWPA.
An aggrieved freelance worker or a public prosecutor may bring a civil action to enforce the FWPA.
California Adds Household Domestic Services to Its State OSHA
The California Occupational Safety and Health Act of 1973 (Act) governs the enforcement and administration of all occupational health and safety laws to protect employees. The Act excludes household domestic services from the definition of “employment.
Beginning July 1, 2025, the household domestic services exclusion will be deleted from the Act. Instead, the Act will expand the definition of “employment” to include household domestic services performed on a permanent or temporary basis. However, the Act will continue to exclude specified household domestic services, including, among others, those services where an individual who, in their own residence, privately employs persons to perform ordinary domestic household tasks, including housecleaning, cooking, and caregiving.
California Extends Expiration Date of PAGA Exemption for the Construction Industry
After recognizing a shortage of government resources to pursue enforcement of Labor Code violations, the California Legislature enacted the Private Attorneys General Act of 2004 (PAGA). PAGA created new civil penalties for Labor Code violations and allows aggrieved employees, acting as “private attorneys general,” to bring a civil action against an employer on behalf of themselves and other current or former employees to recover civil penalties for Labor Code violations that they have sustained.
PAGA exempts from its provisions, until January 1, 2028, an employee in the construction industry performing work under a valid collective bargaining agreement in effect any time before January 1, 2025.
California has extended the sunset of this exemption to January 1, 2038.
Training to Janitors on Sexual Violence and Harassment Prevention
Assembly Bill 2364 increases the amounts that employers are required to pay to qualified organizations that provide mandatory sexual violence and harassment prevention training to janitors. The amounts will increase from $65 per participant to $200 per participant for training sessions having fewer than ten participants, and $80 per participant for training sessions with ten or more participants, except as specified. These increases will be in effect until January 1, 2026, and then will increase each year thereafter.
Assembly Bill 2364 also requires the California Department of Industrial Relations to contract with the Labor Center at the University of California, Los Angeles to study opportunities to improve janitorial industry worker safety and rights.
California Extends “Employee” Exemption Applicable to Newspaper Distributors
Existing California law, as established in the case of Dynamex Operations W. Inc. v. Superior Court, 4 Cal. 5th 903 (2018) (Dynamex), creates a presumption that a worker who performs services for a hiring individual or entity is an employee (rather than an independent contractor) for purposes of claims for wages and benefits.
Existing law requires application of a three-part test, commonly known as the “ABC” test, to determine if workers truly are employees or independent contractors. The test asks:
Answering these questions in the affirmative means the worker is an independent contractor.
Existing law exempts specified occupations and business relationships from the application of Dynamex. These exemptions include a temporary exemption for newspaper distributors working under contract with a newspaper publisher and newspaper carriers until January 1, 2025. As part of that temporary exemption, existing law required every newspaper publisher or distributor that hires or directly contracts with newspaper carriers to submit information on carrier payroll taxes, wage rates, and wage claims to the Labor and Workforce Development Agency (LWDA), on or before March 1, 2022, March 1, 2023, and March 1, 2024.
Assembly Bill 224 extends the operation of that exemption to January 1, 2030. The bill requires the information on carrier payroll taxes, wage rates, and wage claims to be reported to the LWDA on or before March 1, 2025, March 1, 2026, March 1, 2027, March 1, 2028, and March 1, 2029.
California Labor Code Extended to Port Drayage Motor Carriers
California Assembly Bill 2754, which becomes effective on January 1, 2025, extends existing Labor Code provisions to port drayage motor carriers, which, in general, refers to trucking companies that specialize in transporting goods in and out of a marine terminal at a port.
The Labor Code provisions that will be extended to such carriers will prohibit a person or entity from entering into contracts for labor or services with certain types of contractors if they know or should have known that the contract does not include sufficient funds to allow the contractor to comply with all applicable employment laws. The law also will impose joint and several liability (which means that each defendant is liable for the full extent of the plaintiff’s damages) for customers of port drayage motor carriers where the motor carriers misclassify drivers as independent contractors.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, California, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
[1] A hiring party does not include (1) the U.S. government; (2) the State of California or any subdivision; (3) a foreign government; or (4) an individual hiring services for the personal benefit of themselves, a family member, or their home.
