California AB5 law?

[SJ77]

Anyone know if we need to stop allowing California residents to receive commission checks if they use downloads/marketplace due to California AB5 law?

[bfarber]

I would think, reading the outline of the law, that most gig jobs online will still qualify as independent contractor status...but as always, if in doubt, consult with an attorney to protect yourself.

[SJ77]

It’s really starting to be scary the way the regulations are coming through. 
 

I’m close to simply blocking all California members from my platform/service

 not worth the risk 

[SJ77]

I should ask this, will IPS continue to allow California developers to sell in the marketplace? Threat of lawsuit demanding min wage, unemployment and health care be provided to “employees”, seem hardly worth it. 

[Rhett]

it's in no way shape or form related imo.  AB5 is about a "Contractor vs Employee" someone who sells their own items in the marketplace is neither. 

[SJ77]

On 12/5/2019 at 8:35 AM, Rhett said:

it's in no way shape or form related imo.  AB5 is about a "Contractor vs Employee" someone who sells their own items in the marketplace is neither. 

After looking deeper into it, marketplaces all over are scrambling to stop working with their California contributors. 

See, there is an ABC test

1) Part A of the test requires that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

2) Part B of the test requires that the worker performs work that is outside the usual course of the hiring entity’s business; and

3) Part C of the test requires that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

 

A and C are easy, it's B that scares the hell out of me.

Consider your marketplace, it fails step B hard. It's software being sold there. You're a software company! Moreover, it's not just any software, it's software that extends YOUR main product.

I hate to say it, REALLY... but unless you want to be on the hook for paying minimum wage, health care and other benefits to your California contributors I suggest you consider getting them out of your marketplace ASAP!!

California SUCKS!!!

[opentype]

As Rhett already said: none of it even applies. There is no “contract”. No one is “hired”. No one is a “worker”. No one gets “wage” … Marketplace Contributors are neither independent contractors nor employees. They don’t work for IPS in any way, so that test simply isn’t applicable. 

P.S. That law sounds like a very good idea for the cases where it actually applies. 

[Rhett]

 

25 minutes ago, SJ77 said:

After looking deeper into it, marketplaces all over are scrambling to stop working with their California contributors. 

See, there is an ABC test

1) Part A of the test requires that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

2) Part B of the test requires that the worker performs work that is outside the usual course of the hiring entity’s business; and

3) Part C of the test requires that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

 

A and C are easy, it's B that scares the hell out of me.

Consider your marketplace, it fails step B hard. It's software being sold there. You're a software company! Moreover, it's not just any software, it's software that extends YOUR main product.

I hate to say it, REALLY... but unless you want to be on the hook for paying minimum wage, health care and other benefits to your California contributors I suggest you consider getting them out of your marketplace ASAP!!

California SUCKS!!!

 

Don't overthink it, which you are,  think of the marketplace fee that is charged as a gateway fee for processing, that is really all it is, and we pass that long.   Nothing else applies here. 

Anyone selling anything in the marketplace is doing so themselves, for themselves, not for IPS, we pass along the processing fee.  It's really that simple.