AB 5 is Gone for Now!

Many businesses, including staffing agencies such as San Luis Personnel Services, were greatly relieved to receive the news today that California AB 5 is “dead for now”. The California legislature considered the bill in 2017 and continued it to 2018 with a hearing scheduled for January 18th in the Assembly Appropriations Committee. The Chairperson of the Assembly Appropriations Committee declined to take the bill up for a vote in the committee which effectively killed the bill for 2018. Unfortunately, the matter could come again in a different or a new bill later in 2018.

AB 5 was definitely a “Job-Killer” bill and one of the most ill-conceived bills that I have read in many years. AB 5 required employers with 10 or more employees to offer additional hours of work to existing part-time, nonexempt employees before hiring or using additional employees or subcontractors, including temporary workers.

Requiring businesses and hiring authorities to first offer jobs to any part-time, qualified employees and to justify why a “new” employee is being hired creates laborious and unnecessary work for Human Resources and other hiring authorities to evaluate every part-time employee’s skills for any job opening. Equally important, it would frequently prevent businesses from hiring the applicant who is the most qualified for the position. Instead, businesses would have to increase the hours for less qualified employees resulting in lower productivity. It is my opinion that some companies would decide to just not hire additional employees due to the added workload, the loss of flexibility in hiring, the removal of choice to hire the best candidate and the fear of litigation.

There is no doubt that AB 5 would have destroyed many jobs –harming temporary and contract workers, unemployed candidates seeking employment, staffing firms, businesses and the California economy.

Congratulations and thank you to the California Chamber of Commerce, the American Staffing Association, the California Staffing Association and all others who worked to be sure that legislators understood the damage that could be done to employers and prospective employees by AB 5.

Julia S. Aguilar
Principal, CSP