California’s newest law, AB-5, has been characterized by the media as a bill that would classify gig workers like Uber and Lyft drivers as employees by codifying the 2018 Dynamex case. AB-5 confirms that its express intent is “to codify the decision in the Dynamex case.” Even counsel for Uber has characterized AB-5 as a codification of the 2018 Dynamex decision. But AB-5 goes well beyond the Dynamex case in exposing a wide range of California businesses, now dubiously ordained as “employers,” to new and potentially lethal damages claims that appear to have been entirely overlooked by the media.

In Dynamex Operations West v. Superior Court, (2018) 4 Cal.5th 903, a driver who alleged he had been misclassified as an independent contractor sued for wage-and-hour violations and for reimbursement of his costs, including fuel and tolls. The court of appeal in Dynamex held that the provision of the Labor Code that applied to employee cost reimbursements was covered by the Borello test—the standard multi-factor common law test for independent contractor status that had been the law in California for many years—and remanded the cost reimbursement issue back to the trial court. The petition for review in Dynamex did not raise the cost reimbursement issue, which was, therefore, not before the Supreme Court. The Supreme Court’s ruling in Dynamex was, accordingly, limited to “violations of the obligations imposed by the wage order …” and addressed “only that issue.”

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