It’s getting increasingly difficult for companies to classify workers as independent contractors. California Assembly Bill 5 (AB5), which became law on Jan. 1, 2020, imposes new restrictions. But it’s not just California-based companies that need to worry. Even if your firm is not in California, you need to pay attention. Other states have similar restrictions already in place. And still others are watching California closely with thoughts of passing their own legislation.

For many businesses, this is a game changer.

That’s because having to reclassify any workers from independent contractor to employee means you must suddenly comply with a host of laws, including minimum wage and overtime pay requirements, workers’ compensation, unemployment insurance, expense reimbursement, paid sick leave and paid family leave. You also need to pay the employer portion of the workers’ Social Security tax obligation.

Classification has gotten very tricky — and risky

But that’s not all. It has long been challenging to determine how workers must be classified. Now, with new legislation redefining who can work as independent contractors, the task will be even more complex and confusing.

And there’s no room for error. Misclassification could result in legal fines, unpaid wages due, litigation costs, and lost clients due to unfinished and late projects.

Save your company the risk of misclassification. Contact Robert Half today.

Don’t get caught unprepared

How do you plan to navigate this new legislation? Is your internal staff up to date on the many nuances? And do they have the time to devote to assuring every worker is properly classified? Remember, it’s not just new workers that need to be evaluated but also existing ones. And the time and resources you’ll need can quickly multiply if you rely heavily on contract talent or creative freelancers.

Is the solution just to hire full-time staff only? Hardly. Not every job requires a full-time employee. And bringing in contract professionals is often the only way to cost effectively access the specialized skills you need for a particular project.

The best way to reduce the risk of worker misclassification is by adding Robert Half full-time engagement professionals.

Why? Not only are these contract professionals highly skilled and experienced, but they are also employees of Robert Half. So you don’t have to worry about compliance with independent contractor legislation.

We focus on getting you the right talent quickly so you can concentrate on meeting your business goals. We offer:

  • Experienced contract professionals available ASAP
  • Long-term project support on our payroll through our full-time engagement professionals
  • Accounting and finance, technology, creative and marketing, legal and administrative talent to power your projects

Sign up to listen to Robert Half's on-demand webinar about independent contractor legislation now!