Tag independent contractors

California Assembly Bill 5 (AB5), signed into law by the state’s governor in September of 2019, went into effect on January 1, 2020.  Informally referred to as the “Gig Worker” bill, AB5 means some big changes for contractors and companies who use them. This blog will offer a broad overview of AB5, its current status, potential complications you might face, and some examples of ways California businesses and other businesses have responded to the new law.

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Throughout various stages, your startup or small business may work with independent contractors (“I.C.s”) to meet the ever-changing needs of your company. Using I.C.s allows you to pay for services, such as software/app development and sales, without the need to have a fixed employee salary or providing benefits, and thus, potentially saving your business money. However, the IRS has specific guidelines for determining if the people who work for you are I.C.s or if they are really employees.

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