As discussed in Part I of this series, independent contractor agreements contain a number of key protective provisions, the majority of which are driven by the type of services/work to be performed and the relative risk to each party. These provisions tend to be highly negotiated between the parties, in part due to the fundamental differences in the objectives of each party.

Independent contractor (IC) arrangements are as diverse as they are commonplace in today’s business. An IC may be engaged to perform a simple, limited project, such as providing flowers for a conference, or to lead a more complex project, perhaps as an architect or software developer.

With the recent passage of Assembly Bill 5 (AB 5), California has dramatically reshaped the relationship between independent contractors and their clients. An estimated 1 million Californians who are currently classified as independent contractors may be reclassified as employees under AB 5, beginning January 1, 2020. Businesses that have become accustomed to using lower-cost independent contractors to perform critical business functions will need to revisit these arrangements and make necessary operational and pricing adjustments to comply with the new rules.