As states kick off their 2022 legislative sessions, one main issue lawmakers are expected to explore within the area of labor and employment is worker classification, according to state and local government relations firm MultiState Associates.
In 2019, California enacted AB 5, codifying the “ABC Test” across a variety of labor laws to determine whether or not workers should be classified as employees or independent contractors. This decision, while exempting some established professions, required “gig workers” to be classified as employees and expanded the employment benefits these workers were to receive. The law was overturned by Prop 22, which voters approved in November 2020, allowing gig workers to be classified as independent contractors. However, last August, a state judge ruled that Prop 22 was unconstitutional. Since AB 5 was signed into law, various professions have been removed from this law.
Following California’s lead, lawmakers in additional states have introduced legislation to expand their own worker classification laws and classify more workers as employees under additional employment laws. (Many states have ABC Tests codified, but only for some statutes, like unemployment insurance or workers’ compensation.) As a response to the “blue state” model, legislators in states with Republican trifectas have begun introducing and enacting legislation to harmonize the definition of “employee” across various labor laws with a less-restrictive test, allowing a greater number of workers to be classified as independent contractors. Additionally, states have begun to crack down on employee misclassification with greater enforcement without requiring changes to state employment tests.
Last year, nine states introduced legislation to codify the ABC Test, although none of the bills advanced. Three states – Alabama), Louisiana and West Virginia – enacted laws codifying alternative employment tests.
In 2022, MultiState Associates expects blue states, particularly those with progressive legislatures, to continue attempts to codify the ABC Test, while red states continue to codify less-restrictive, harmonized employment tests. States across the country, regardless of partisan control, will continue to crack down on employee misclassification.
