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Barton Blog / Healthcare News and Trends

How Assembly Bill 5 Might Affect Locum Tenens Providers

Posted on: November 05, 2019

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written by

Chris Keeley

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What is Assembly Bill 5?

On April 30, 2018, the California Supreme Court issued its opinion in Dynamex Operations West, Inc. v. Superior Court of Los Angeles. In its decision, the California Supreme Court overthrew the “Borello” test used in California to determine whether independent contractors were free from direction and control. The Court announced that the Borello test would be replaced by a modified version of what is commonly known as the “ABC” test for independent contractor classification. Like the Borello test, this test seeks to determine whether a worker is free from direction and control in providing his/her services. The difference is that the Dynamex ABC test examines different factors than those considered in the Borello test.

When a state changes its methods of making this determination, it can affect locum tenens providers. Barton Associates strives to stay as up-to-date as possible on all state-specific laws. Although we aren’t your attorneys and can’t provide any legal advice, we feel it is important to share valuable information about developments in state law with our providers to ensure our providers are aware of any changes in their practicing state. Below we have outlined what we know about California’s recently enacted Assembly Bill 5 (AB5), which is scheduled to take effect in January 2020.

How does it impact locum tenens?

Generally, locum tenens providers provide clinical services as independent contractors because they perform their services and make decisions for their patients as they see fit in their discretion. The healthcare facilities, locum tenens agencies, and others with whom they work do not exercise control or direction over them. Even so, states vary in how they believe whether an independent contractor is free from direction and control.

While the change was significant, its impact was fairly inconsequential to the locum tenens industry because the Court’s decision was limited to certain wage issues. That all changed, however, with the introduction and passage of AB5, which applies the Dynamex ABC test to all questions of worker classification.

Because locum providers are generally categorized as independent contractors, it is easy to be concerned about how this bill will affect the locum tenens industry. There is good news though. Although AB5 changed the test for independent contractor classification, like the old test it still seeks to determine whether a worker is free from direction and control in providing his/her services. Further, certain classes of workers are expressly exempt from this new bill, including several types of healthcare providers such as physicians, surgeons, dentists, podiatrists, and psychologists.

The full impact of AB5 is yet to be seen, but we intend to stay on top of it and provide updates as we learn more information.

Chris Keeley
About Chris Keeley

Chris Keeley is the content marketing copywriter and former recruiter at Barton Associates' Peabody, MA, headquarters. Native to the Boston area, Chris joined the Barton team in May 2019 after earning his degree is communications from Salem State University partnered with completing a sport-marketing program in Rotterdam, Netherlands.

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