How Employers and Independent Contractors Remain Independent under CA AB5

Nellie Alkap’s write up in Small Business Trends describes how to survive doing business in California under controversial AB5. Businesses and independent contractors both take issue with the new law. It places extra burdens on employer and employee alike. Employers cover more than payroll taxes. They also pay worker’s compensation and employee benefits. These include health insurance, retirement and more. They also pay compliance expenses. When a company uses an independent contractor, the contractor takes on the burden of the 15.3% self-employment tax (7.65% employee plus 7.65% employer payroll taxes). The contractor then gets to deduct reasonable business expenses. What needs to be done? Read here.