Modern Salon
MenuMENU
SearchSEARCH

Landmark CA Legislation Defines "Independent Contractor"

AB 5 does provide relief for establishment owners that both work as stylists themselves as well as rent booth space.

Anne Moratto
Anne MorattoDirector of Brand Content Strategy, MODERN SALON and NAILS
Read Anne's Posts
September 13, 2019
Landmark CA Legislation Defines "Independent Contractor"

 

3 min to read


The California high court has been considering how some work is defined as "contract work" (or some employees as "independents," as in the salon world of suite, booth, and chair renters or “gig workers” like those who work for trucking companies) and if this might be a way for employers/owners to get around employee and wage laws.  This week, lawmakers passed a landmark bill, Assembly Bill 5 or AB 5, that will require some independent contractors to be reclassified as employees.  AB 5 is being sent to Governor Gavin Newsome for his signature. (AB 5 codifies the decision of the California Supreme Court in the Dynamex Operations West, Inc. v. Superior Court of Los Angeles regarding employee classification.)

The three prong A,B,C test will apply, with exception to certain industries that are exempt within the bill. That includes barbers, cosmetologists, estheticians, electrologists, and manicurists, who are among the listed exempt professions.

Ad Loading...

This ABC test referred to three factors that the hiring entity must establish:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.)

While barbers, cosmetologists, estheticians, electrologists, and manicurists are exempt, the individual must still:

Ad Loading...

• Set their own rates, processes their own payments, and be paid directly by clients

• Set their own hours of work and have sole discretion to decide the number of clients and which clients for whom they will provide services

• Have their own book of business and schedule their own appointments

• Maintain their own business license for the services offered to clients

If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.

Ad Loading...

“This means that the professional beauty industry is exempt from the A,B,C test that resulted from the Dynamex case,” says Myra Y. Irizarry Reddy, Government Affairs Director for the Professional Beauty Association (PBA). “There are still requirements that must be followed, and compliance issues that surround operating a hybrid salon but the exemption within AB 5 does provide relief for establishment owners that both work as stylists themselves as well as rent booth space. Other states may attempt to mirror this legislation in the future and we definitely will be looking for this in 2020.”

Stay informed on legislation affecting our industry at ​https://probeauty.org/stateleg/

More In The Know

A man cuts a man's hair
In The Know|Articles|Aug 6, 2026

In Dubai, Clients Visit the Salon Every Week. Here’s What That Market Can Teach You

In Dubai, a salon visit isn’t an appointment. It’s a weekly routine, and clients can spend $800 to $1,400 a month on it, according to Gaurav Tripathi of MADI International. On October 6-8, 2026, the market behind those numbers opens its doors as Beautyworld Dubai marks its 30th edition at the Dubai World Trade Centre, bringing together distributors, brands, stylists and salon owners from all over the world.

Ad Loading...
A woman with long brown hair, a black sleeveless blouse, and a beaded headband.
In The Know|Articles|Jul 2, 2026

Mireya Villarreal Announces From Chair to Boss Live, a New Business Education Event for Beauty Professionals

Mireya Villarreal, founder of From Chair to Boss™, is bringing together beauty industry leaders for a new one-day educational event designed to help salon professionals strengthen the business side of their careers. From Chair to Boss Live! will take place September 28 at the Hilton Oak Brook Hills Resort & Conference Center in Oak Brook, Illinois.

Ad Loading...
In The Know|News|May 22, 2026

Aura Salonware Announces 2026 Scholarship Winners

Aura Salonware is proud to announce its 2026 scholarship recipients. This first-time scholarship in partnership with the Professional Beauty Association awarded three different scholarships to support beauty professionals at every point in their professional journey.

Ad Loading...