California startups and independent contractors are in desperate need of a lifeline before they are gone for good. This state has long favored the employee over the employer, but the California Supreme Court’s new “ABC” test tips the scales even further by making it practically impossible for startups to compensate their workers. As a remedy, I propose exemptions to the test for sophisticated contractors who do not need the state’s protection, certified owners who have demonstrated fair play, and small businesses which are still in the developmental stages. Though the Court based its decision largely on a policy of protecting the proverbial little guys from big bad businesses, it did not address the harm the new law will do to the other little guys: cash-strapped startups. The purpose of this paper is not to undermine the policy behind the Court’s decision but to lobby for the group of people the Court overlooked. Indeed, the ABC test is a win for justice—simplifying convoluted and impractical standards for employee classification under minimum wage orders. Now the law must look toward protecting the honest small businesses that are so essential to California’s identity.
Protecting the Little Guys: How to Prevent The California Supreme Court’s New “ABC” Test from Stunting Cash-Strapped Startups,
12 J. Bus. Entrepreneurship & L.
Available at: https://digitalcommons.pepperdine.edu/jbel/vol12/iss1/7