Can Parents in California Hire Tutors and Teachers Without Violating AB-5?

With the announcement of Governor Newsom’s strict requirements to reopen public schools, many California parents are scrambling for alternatives to traditional in-person learning. Options like homeschooling, hiring nannies, or forming learning pods with private teachers are gaining popularity. However, an important legal question arises: Are tutors and teachers considered employees under California’s AB-5 law?

Let’s explore how AB-5 impacts hiring tutors and private teachers, along with ways to stay compliant with this law.

What is California AB-5?

California Assembly Bill 5 (AB-5) changed how California classifies workers. It expands on the Supreme Court’s decision in Dynamex Operations West Inc. v. Superior Court, making it the employer’s responsibility to prove that a worker is not an employee.

Since January 1, 2020, AB-5 has significantly affected gig workers and freelancers, but it applies to all industries. The law uses the ABC test to determine whether a worker is an employee or an independent contractor.

To qualify as an independent contractor under AB-5, the worker must meet these three conditions:

1. Control: The worker must control how, when, and where the work is performed, with no intervention from the employer.
2. Type of Work: The worker’s tasks must be outside the employer’s usual business activities.
3. Independent Trade: The worker must be engaged in an independent trade or business similar to the work performed.

If all three criteria are not met, the worker is classified as an employee. Some professions, such as cosmetologists and construction workers, are exempt from AB-5, but teachers and tutors are not on the exemption list.

Are Tutors and Teachers Employees Under AB-5?

When hiring tutors or teachers for distance learning or homeschool support, parents must consider the nature of the work. For a tutor or teacher to qualify as an independent contractor, they must have total control over:

• What they teach (e.g., curriculum and lesson plans)
• How they teach
• When they teach (e.g., hours)
• Where they teach

This makes it difficult for many tutors hired for structured distance learning to meet the criteria. However, homeschool or preschool tutors might qualify, depending on their level of control over the work.

Consequences of Violating AB-5

Parents hiring tutors or teachers as independent contractors in violation of AB-5 risk facing severe penalties. Misclassifying a worker as an independent contractor can result in fines ranging from $5,000 to $25,000 per violation. While enforcement of AB-5 in these scenarios remains unclear, it’s crucial for parents to take the law seriously when hiring help for their child’s education.

How Parents Can Stay Compliant with AB-5

To avoid violating AB-5, parents should take the following steps:

1. Hire an Established Business: Look for tutors or teachers who operate as a licensed business or LLC. This ensures they are independent and in compliance with the law.
2. Avoid “All-in-One” Hires: Don’t hire someone to do multiple jobs, such as tutoring, childcare, and cleaning.
3. Hire as an Employee: If the tutor does not meet the ABC test, consider hiring them as a household employee. This requires compliance with California wage and hour laws, worker’s compensation insurance, and payroll taxes.

What Tutors and Teachers Can Do to Comply with AB-5

If you’re a tutor or teacher looking for work in California, there are ways to remain compliant with AB-5:

• Establish a Business: Form an LLC or another business entity to provide tutoring services as an independent contractor.
• Purchase Liability Insurance: Protect yourself and your business by obtaining the necessary coverage.
• Specialize in Educational Services: Focus on providing curriculum-based teaching to better qualify as an independent contractor.

If you have questions about forming a business entity or navigating AB-5 regulations, contact us for a free consultation.

Conclusion

California’s AB-5 law has created challenges for parents hiring tutors and teachers to support distance learning or homeschooling. While the law aims to protect worker rights, it requires careful consideration to avoid misclassification. Parents should either hire established independent tutors or bring them on as employees to comply with AB-5. Tutors, on the other hand, may need to form a business to continue working independently. By understanding and following the ABC test, both parents and educators can stay on the right side of the law.

For more guidance on AB-5 and other employment laws, visit our blog or contact us today.