SB 1423 Summary

• Establishes an alternative test under Labor Code Section 2750.4 for classifying individuals as independent contractors rather than employees if they meet specified conditions, effective April 1, 2021.

• Requires written contracts of limited duration that specify services, remuneration, estimated hourly rate meeting or exceeding minimum wage, meal/rest breaks for multiple consecutive hours, and premium pay for hours exceeding 8 per day.

• Allows independent contractors to set their own schedule, decline work offers without penalty, work for competing entities, and keep tips or gratuities without deduction.

• Mandates contracting entities or platforms provide occupational accident insurance covering up to $1,000,000 in medical expenses or two years of coverage, $50,000 death payment, $150,000 survivor payment, and disability payments equal to 66% of average weekly earnings.

• Makes independent contractors eligible for state disability insurance and paid family leave benefits, and requires contracting entities to maintain written anti-discrimination policies.