Assembly Bill 5 also referred to as the Gig Worker Law and shortened to AB5.

This law went into effect in California Jan 1, 2020 and will drastically effect many independent contractors and how they operate. It is HIGHLY recommended to seek legal advice or speak with a CPA. This article is meant in no way to be legal advice but merely to inform you and get you started thinking about it.

What is AB5? It changes who can qualify to work as an independent contractor. Real Estate Agents have no fear they left you exempt. here is a brief article for you to review just so you are clear.

However, transaction coordinators are effected. Single Independent TC’s should be able to remain independent under the Business to Business exemption as long as they meet all of the criteria below. However, in house TC’s will now have to be W2 employees. and TC businesses with multiple TC’s will also be required to make them W2 employees.

Business to Business Exemption Criteria

The TC must be free from the hiring firms control while doing the work (And must be set forth by a contract for each transaction)
- This holds true as most TC’s set their own hours and how they work they merely assist in meeting compliance and deadlines set forth by C.A.R.
- In House TC’s however, could be considered directly under control of the brokerage which would be the first thing disqualifying them as Independent.
Provides service directly to the contracting business (Agent) and not to the client.
- This is also true as TC’s work for the agent completing documentation and file completion.
The TC must have a written contract with the agent for each transaction
Has all business Licenses and Tax forms.
- Sole Proprietorship
  - File DBA or FBN with county Assessor
  - EIN Tax number
  - County/City Taxes Registration
  - Business Bank Account
- Checks must be paid to the business not to the individual
Must work at a different location than the hiring firm
- This is the other step that will disqualify In House TC’s as they usually work in the office of the brokerage.
Actually contracts with other businesses (agents/brokerages) to provide the same or similar services.
- This could also disqualify In House TC’s as most of them usually only work for the one brokerage.
advertises and holds itself out to the public as available to provide the same or similar services
Provides its own equipment and programs to perform services.
- Their own computer and/or transaction management program.
  - TCworkflow
  - TCdocs
  - etc
Negotiates its own rates
Is not performing work for which a license from the State board is required.
- No licensing or even certification is required to be a TC.
  - A TC can be certified through C.A.R. however it is not required.

This makes things more complicated but not impossible and a good Independent Transaction Coordinator will likely have all of this done already. I hope you found this article helpful. If so please share it for others. And again this is not meant as legal advice in any way. Thank You

For more information on exemptions from AB5 click here.