AB 1514 removes Section 2775 and the Dynamex/ABC test from contracts for a defined set of "professional services" and allows the older Borello multi-factor test to govern classification only if the hiring entity proves six enumerated conditions. The bill lists specific occupations (from graphic designers and freelance writers to licensed estheticians and manicurists), attaches work-location, licensing, payment and business-clienting conditions, and adds procedural requirements for certain roles.
The law matters because it changes the default path to independent-contractor status for many skilled and creative workers. Employers and compliance teams must document the six-factor showing, licensed professions face separate Business and Professions Code rules, and the bill includes a targeted reporting requirement and a temporary, phased rule for licensed manicurists that expires in 2029.
The result is a narrower but more concrete route to contractor classification with new evidence and recordkeeping implications for businesses and regulators.
At a Glance
What It Does
The bill excludes contracts for statutorily defined "professional services" from Section 2775/Dynamex and permits classification under Borello only if the hiring entity demonstrates six specific factors, including a separate business location, rate-setting ability, and a book of business. It also enumerates dozens of covered occupations and sets distinct conditions for some categories (e.g., photographers, freelance writers, licensed personal-care workers).
Who It Affects
Creative freelancers (photographers, writers, designers), licensed personal-care workers (manicurists, estheticians, cosmetologists), certain regulated professionals (appraisers, foresters, enrolled agents), salons and small businesses that rent space, and HR/compliance teams responsible for classification decisions and recordkeeping.
Why It Matters
By resurrecting Borello for a defined universe of services, the bill shifts the classification analysis from an automatic ABC test to a fact-based showing — changing how employers document relationships, how regulators investigate misclassification, and how some workers balance independent-business status against labor protections.
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What This Bill Actually Does
AB 1514 creates an escape hatch from the Dynamex/ABC test for a listed set of "professional services." Rather than applying Section 2775’s presumption that a worker is an employee unless all three ABC prongs are met, the bill says those contracts fall outside Section 2775 and instead can be governed by the older Borello multi-factor standard — but only when the hiring entity demonstrates six discrete facts. Those facts track common indicia of an independent business relationship: a separate business location, required local business registration when applicable, the ability to set rates, control over hours outside of deadlines, an existing book of clients or availability to other customers, and regular exercise of discretion.
The statute goes on to define what counts as "professional services." The list mixes creative freelancers (graphic designers, freelance writers, photographers subject to written contract requirements), intellectual-service roles (grant writers, certain HR administrators), regulated professions (enrolled agents, appraisers, registered foresters), and personal-care licensees (esthetician, barber, cosmetologist, manicurist) subject to specific operational tests. For many categories the bill conditions the Borello path on written contracts that fix pay, intellectual-property arrangements, and payment timing; other categories are gated by whether the worker is directly replacing an employee or primarily performing work at the hiring entity’s premises.The bill also inserts a few tailored rules.
Licensed manicurists are listed among covered professions but only if they meet particular business practices (set rates, process payments themselves, maintain a book of business, hold business licenses, and, when working on-site at a salon, issue a Form 1099 to the salon). The Employment Development Department (EDD) and the Division of Labor Standards Enforcement (DLSE) must report specified misclassification data for manicurists to the Legislature by June 1, 2026, and the manicurist-specific provision becomes inoperative on January 1, 2029.
Finally, the measure confirms that certain occupations — most notably real estate licensees, home inspectors, and licensed repossession agencies — remain governed primarily by the Business and Professions Code or other existing statutory schemes rather than Section 2775.
The Five Things You Need to Know
The hiring entity must demonstrate all six statutory factors (separate business location; required local business license if applicable; ability to set or negotiate rates; control over hours outside deadlines; an independent book of business/availability to other clients; regular exercise of discretion) before Borello governs instead of Dynamex.
Photographers, videographers, photo editors, and similar content creators qualify only when they work under a written contract that fixes pay and payment timing, do not directly replace an employee at the same volume, do not principally work at the hiring entity’s site, and are free to work for other hirers.
Freelance writers, translators, editors, illustrators, and related content contributors qualify as "professional services" only under written contracts that specify rates, intellectual property rights, and payment timing, and where the worker is not replacing an employee or restricted from outside work.
Licensed manicurists and other personal-care licensees qualify if they set their own rates, process payments directly, schedule their own clients, hold business licenses, and, when working at a salon, issue a Form 1099 to the salon; EDD and DLSE must report misclassification data by June 1, 2026, and the manicurist provision lapses on January 1, 2029.
Real estate licensees, home inspectors, and repossession agencies are carved out: real estate licensees fall under Business & Professions Code Section 10032 (with unemployment and workers’ comp rules separately specified), home inspectors remain governed by the Business & Professions Code chapter for inspectors, and repossession agencies are subject to Section 7500.2 when free from hiring-party control.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Main rule: exclude 'professional services' from Section 2775/Dynamex and permit Borello if six factors are shown
This subsection is the statute’s pivot: it removes Section 2775 and the Dynamex holding from contracts that fall within the bill’s definition of "professional services." Instead of the ABC (Dynamex) test, the hiring entity may rely on Borello — but only by affirmatively demonstrating six specific factors about the working relationship (location, licensing where required, rate-setting, hours control, active market for the worker’s services, and exercise of independent judgment). Practically, that means employers must assemble and retain evidence on each factor if they want Borello to apply.
Enumerates which occupations and service types qualify as 'professional services'
Subdivision (b) lists a broad, heterogeneous group of services — from marketing and graphic design to enrolled agents and appraisers — and sets category-specific qualifiers. Several entries require the contracted work be original/creative (marketing), predominantly intellectual and variable in character (HR admin), or governed by a written contract fixing pay and IP terms (writers, content contributors). The provision mixes function-based standards (exercise of discretion; not replacing an employee) with occupation-specific rules, producing a set of included services that combine objective and subjective tests employers must parse.
Licensed personal-care workers (including manicurists): operational tests, reporting, and sunset
Subparagraph (L) sets a checklist for licensed estheticians, electrologists, manicurists, barbers, and cosmetologists to qualify: set rates, accept payments directly, decide hours and clients, maintain a book of business, and hold a business license. When services occur at the hiring entity’s location, the worker must issue a Form 1099 to the salon owner. The subsection also mandates an EDD/DLSE report to the Legislature on misclassification allegations involving licensed manicurists back to 2020, due June 1, 2026, and explicitly makes the manicurist-specific rules inoperative on January 1, 2029, creating a temporary, reviewable carveout.
Content creators and freelance writers: written-contract guardrails
Photographers, videographers, photo editors, freelance writers, translators, and related contributors qualify only when the engagement is governed by a written contract that specifies rates, payment timing, and IP terms. Additionally, the statute disqualifies workers who are directly replacing employees, who primarily perform work at the hiring entity’s premises, or who are contractually restricted from servicing multiple hirers. These contract-language requirements create concrete drafting and recordkeeping obligations for hiring entities seeking Borello treatment.
Carveouts: professions governed by Business & Professions Code and other statutes
Subdivision (c) clarifies that certain occupations remain governed by preexisting regulatory codes rather than the Section 2775/Dynamex framework. Real estate licensees are governed first by Business & Professions Code Section 10032; if that section does not apply, unemployment insurance rules (UI Code Section 650) and workers’ compensation code apply, with Borello reserved for other Labor Code matters. Home inspectors stay under their Business & Professions Code chapter, and repossession agencies follow Section 7500.2 when they are free from hiring-party control. These cross-code references shift analysis to occupation-specific statutory schemes in several key industries.
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Explore Employment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Creative freelancers (photographers, writers, graphic designers): The bill preserves a clearer route to independent-contractor status when engagements are governed by written contracts that allocate pay, IP, and payment timing, reducing the automatic employee presumption.
- Licensed personal-care professionals who meet the checklist (esthetician, manicurist, barber, cosmetologist): They can retain independent-contractor classification if they run a separate business, set rates, take payments directly, and maintain a book of business — preserving salon booth-rental and contractor models for a limited time.
- Hiring entities (salons, agencies, publishers, small businesses): Firms that prefer contracting can avoid automatic ABC classification if they document the six statutory factors and use the written-contract safeguards required for many categories.
- Digital content aggregators and licensing intermediaries: The statute expressly contemplates licensing channels for photographers and content creators, enabling intermediaries to operate without triggering the ABC test when the statutory conditions are satisfied.
Who Bears the Cost
- Workers who lack the organized business attributes in the six-factor list: Individuals who depend on a single hiring entity, lack a separate business presence, or cannot set rates may be treated as employees under Dynamex when the hiring entity cannot prove the Borello showing.
- Employers and compliance teams: Businesses must gather and preserve evidence on six factors, draft stricter written contracts, and track licensing/1099 rules — increasing legal, HR, and recordkeeping costs and exposure to audits or litigation if documentation is weak.
- State enforcement agencies (EDD, DLSE): The bill imposes a specific reporting duty on EDD and DLSE for manicurist misclassification and broadens the factual inquiries regulators must make across varied professions, adding investigatory complexity and administrative burden.
- Salons and small brick-and-mortar business owners: When independent contractors perform services on-site, salons may receive Form 1099s from workers (per the manicurist provision) and face ambiguity over how to manage space rental versus employer control, increasing operational friction and tax-reporting complexity.
Key Issues
The Core Tension
The central dilemma is between preserving autonomy and market flexibility for skilled, creative, and licensed professionals and protecting workers from employer-driven misclassification: the bill makes it easier for some workers to be treated as independent contractors, but doing so shifts employment-law protections, taxes, and benefits away from workers — and leaves regulators and courts to police whether the paperwork and facts reflect a true independent business or a disguised employment relationship.
AB 1514 mixes objective scaffolding (a six-factor checklist, written-contract requirements, explicit occupational lists) with subjective qualifiers ("not directly replacing an employee," "primarily perform work at the hiring entity’s business location," "predominantly intellectual and varied in character"). That hybrid makes compliance a fact-intensive exercise: employers can avoid Dynamex only by assembling a persuasive factual record, but the statute does not prescribe what documentary evidence suffices, leaving room for litigation and agency discretion.
The photographer/writer contract conditions and the manicurist 1099 requirement create very specific operational rules that can be enforced independently of the broader classification analysis, raising thorny questions about how to adjudicate mixed arrangements (e.g., a manicurist who both rents a chair and takes direction from a salon on pricing or clientele).
The temporary treatment of licensed manicurists — an actionable reporting requirement with a sunset in 2029 — signals legislative intent to evaluate the policy empirically, but it also creates short-term regulatory uncertainty for salon operators and workers planning their business models. Cross-references to the Business and Professions Code and to unemployment and workers’ compensation statutes mean employers and counsel must map multiple statutory regimes to a single working relationship; that interlocking framework can produce inconsistent outcomes depending on which statute an investigator or court deems applicable.
Finally, although the bill enables business-model flexibility for many professionals, it risks encouraging arrangements that strip workers of access to benefits and protections if employers structure relationships narrowly to satisfy the six-factor showing without genuinely supporting independent business activity.
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