California’s “Professional Services” Exemption To Strict Independent Contractor Definition Licensed Beauticians Among the Eligible

The product of Sacramento politics, specific “professional services” occupations will be exempted from the rigid “Dynamex ABC” standard for classifying independent contractors, California Labor Code 2750.3, effective January 1, 2020 (part of Assembly Bill (AB) 5). See, Dodging the Bullet (October 2019), listing other specific industries/licensed professionals that can be exempt.

Such independent “professional services” include:

• Original and creative marketing advisors;
• Human resources administrators whose “work is predominantly intellectual and varied in character“ and not standardized;
• Licensed travel agents and single member limited liability companies (LLCs) that do contracted work for licensed travel agents and are exempt from licensing;
• Graphic designers;
• Grant writers;
• Fine artists;
• Enrolled agents (qualified tax advisors); and
• Freelance writers, editors, or newspaper cartoonists who provide no more than 35 accepted and used content submissions/year to a given hirer, pertaining to a specific topic or event and provided for in a written contract;

Licensed cosmetologists, barbers, estheticians, manicurists, and electrologists can also fall within the independent “professional services” definition, providing the contracted person:

• Sets his/her own rates, receives payments directly from the clients, and processes her/his own payments;
• “Sets [his/her] own hours of work” and has sole discretion over which and how many clients she/he chooses to service;
• Schedules his/her own appointments and has his/her own book of business;
• Has a business license; and
• Issues a form 1099 to the business owner or salon from which she/he rents her/his space.

As with the other specific industries/licensed professionals that can be exempt from the stricter standard (see Dodging the Bullet), the Borello multi-factor balancing test for the contractor vs. employee classification will continue to apply to the above occupations.

See also:

• California’s Independent Contractors (October 2019)
• Independent Contractor or Employee? (April, 2019)
• Independent Contractor Status? It Depends (November, 2018)

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin

October 18, 2019

California’s “Professional Services” Exemption To Strict Independent Contractor Definition Licensed Beauticians Among the Eligible