When California Assembly Bill 5 was proposed, it exempted some beauty professionals, but did not exempt nail and skin care providers who worked in a booth rental situation. After beauty professionals, including those at the California Aesthetic Alliance, campaigned to change this, the bill was amended to offer exemptions to licensed manicurists and estheticians as well. The bill has passed and is being sent to Governor Gavin Newsom 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.

Barbers, cosmetologists, estheticians, electrologists, and manicurists are among the listed exempt professions.

To be exempted, individuals must:

• Set their own rates, process 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