Hiring and Growth

July 25, 2022: Why It’s a Good Time to Brush Up on Contractor Classification

Mohini Kundu Content Marketer, Gusto 
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July 25, 2022

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AB5 redux

If you work with independent contractors — or you are one — you may be keeping tabs on Assembly Bill 5 (AB5). The California law makes it harder to classify workers as contractors rather than employees. In late June, the U.S. Supreme Court decided not to review a challenge to AB5 brought by the California Trucking Association. The high court also declined to hear a similar case filed by groups representing freelance workers. 

What does this all mean? For now, AB5 is here to stay. So when determining how a worker fits into their business, California employers must use a three-pronged test, commonly known as the “ABC test.” According to the test, a worker should be considered an employee if they:

  • are under a company’s direct control,
  • are engaged in its usual course of business, or 
  • don’t operate their own independent business.

If you haven’t already, you might want to take the ABC test for a spin. Employees are entitled to certain protections and benefits, so you’ll want to make sure you’re providing these if needed. We give you everything you need to know about AB5, plus five ways to prep for the law. And because other states are considering similar bills, it’s worth keeping tabs on this topic even if you’re operating outside of the Golden State. 

How HR professionals are dealing with remote and hybrid work

Human resources professionals have never had to flex so many skills at once. Since the onset of the pandemic, HR workers have had to update sick time policies, revamp workplace culture, and facilitate the adoption of remote and hybrid work structures — on top of performing their regular job duties. 

To get a better feel for the challenges HR pros are dealing with, Gusto surveyed more than 800 HR practitioners and 700 employees from growing companies. Here’s what we learned:

  • Remote and hybrid work complicates compliance: 70% of the HR professionals surveyed said complying with tax and employment laws is more difficult now that more employees are working across state lines.
  • Flexible schedules are the new norm: 42% of HR practitioners said the number of workers in their company on flexible or non-standard working schedules has increased.
  • Maintaining culture is tricky: Three-quarters of HR practitioners said that promoting company culture at a remote/hybrid company is challenging.

Do these trends resonate with your own experience of hybrid and remote work? Let us know by responding to this email, and read the full report here.

Become a stronger leader in 6 steps

As the business landscape evolves, so does leadership. Though not all effective leaders take the same approach to guiding and managing people, all good leaders tend to have the same effect. That is, they inspire, motivate, connect, and nurture.

There are lots of ways to do that — and not all of them require a leadership course or amazing speaking skills. In one of our latest articles, Inc. columnist Jeff Haden outlines six counterintuitive ways to become a better leader. Learn why listening is underrated, meetings should always start on time, and your personal exercise routine matters. 

Read more here.

Fresh From Gusto

Watchlist

JUL 28: Rethinking the Office: Making it Work for Employees of All Generations

In a post-pandemic workplace, different generations of workers have vastly different needs. Business owners are struggling to accommodate longtime Gen X workers while trying to attract Gen Z job candidates. This webinar explores the challenges today’s business owners face in creating a multigenerational office, the unique needs of five different age groups, and the solutions you can adopt to satisfy and retain talent. Register here.

AUG 2: The Changing Workplace—How to Drive Engagement

Keeping employees engaged is key to productivity, employee well-being, and retention rates. But as the workforce has shifted over the past two years, employee engagement has dropped.  In this webinar, you’ll learn how to assess the needs of your current workforce and make positive changes to create an environment where employees are both happy and effective in their roles. Register here.
Find the latest relief options in our Small Business Relief Finder.

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Updated: July 29, 2022

Mohini Kundu
Mohini Kundu Mohini Kundu is a news editor on the Gusto content team. She studied journalism at Northwestern University and started her career at The Huffington Post before embracing the #startuplife.

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