mikechoate
New Member
- 12
anyone have any thoughts on how the recent ruling might affect independent agents in Ca?
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GOVALERT: NAIFA-CALIFORNIA NEEDS YOUR HELP!
Friday, September 7, 2018 (0 Comments)
Posted by: Admin
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NAIFA-California needs your help in fighting a recent California Supreme Court ruling that could change many 1099 contractor relationships into W-2 employees. This could impact you as an agent/advisor; affect independent contractors you hire, and even agents whom you partner on business. Imagine a world where you are now a W-2 employee for every single insurance carrier you’re contracted with? How could this negatively affect your commissions, ability to serve clients, ability to work independently and impact your tax reporting and deductions?
You may have heard about the recent ruling by the California Supreme Court in Dynamex Operations West v. Superior Court (“Dynamex”) that created a new worker classification standard. The new standard referred to as the “ABC Test,” is far more rigid than the previously used scheme to determine whether a worker is an independent contractor or employee. Under this new “ABC test,” a person will be considered an independent contractor only if the hiring entity can prove all three of the following:
(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;
(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.
NAIFA-California recognizes that this ruling could have negative implications across all sectors of the economy, including insurance agents and advisors. The concern is that the Dynamex decision would hurt agents and advisors seeking flexible, independent or part-time work. As such, we are working with others in the broader business community, as well as our partners in the insurance industry, to raise the issue and identify the negative consequences this new test could have on independent contractors. Several stakeholder groups are urging the Legislature and Governor’s Administration to engage on this issue and suspend the application of the Dynamex decision until all parties impacted by this decision can work together to develop a balanced test for determining independent contractor versus employee status that reflects the needs of California’s economy and the workforce. NAIFA-California is tracking this conversation closely to ensure that those working in the insurance and financial services industry are protected.
We need your action on this important decision immediately. Please do the following to help stop this overreach from directly affecting your independence and ability to serve your clients:
Visit https://imindependent.co to sign-up and have your voice heard!
Give to IFAPAC (Insurance and Financial Advisor Political Action Committee)!
Encourage a friend to join NAIFA!
I think an exception to B may eventually be carved out by the courts for insurance agents (if it's even necessary under today's standards) who are self employed and write for a variety of insurance companies, agents, or brokers.
I wonder how it might affect Nationwide's plans to make their agent force all "independent".
Nationwide Switching to Independent Agency Distribution Model by 2020