Gov. Gavin Newsom signed many bills into law affecting California HOAs in 2020. Here’s what associations need to know, and below, you’ll find one of them.
Assembly Bill 5 is a significant new law that changes the legal definition of an employee. The law created Labor Code Section 2750.3 and affects any HOA using “independent contractors” who might be reclassified as “employees.”
Under this statute, a worker is an independent contractor if the HOA actually and contractually does not control or direct the person in the course of their work, the work performed is outside the HOA’s regular business, and the worker also normally and independently performs that work for others. The conversion of workers to employee status may create sick leave and other obligations for the HOA, including payroll withholding duties.
There are many changes in 2020 in the laws affecting HOAs, and boards and managers should seek advice from HOA legal counsel regarding how these changes will affect their associations.