AB5 wouldn't affect services like these under the "Professionals" or "Professional Services" label. [1][2]
Software contracting is largely excluded especially freelance. Even if you needed to get an LLC you could get an out of state LLC for cheaper LLC if $800 in CA is too much, usually around $400-$800 when all setup fees are put in.
AB5 is largely a moot point for software/creative services beyond writing more than 35 articles a year.
Under the ABC test, a worker is presumed to be an employee unless the company proves that the worker:[2]
(A) Is free from the control and direction of the company in performing work, both practically and in the contractual agreement between the parties; and
(B) Performs work that is outside the usual course of the company’s business; and
(C) Is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the company.
If there was ever any issues with (C) which would be the only possible conflict, software/product/creative/engineers can get LLCs to to corp to corp contracting.
AB5 exemptions:
- Doctors (physicians, surgeons, dentists, podiatrists, veterinarians, psychologists)
- Professionals (lawyers, architects, engineers)
- Professional services (marketing, human resources administrator, travel agents, graphic designers, grant writers, fine artist)
- Financial services (accountants, securities broker-dealers, investment advisors)
- Insurance brokers
- Real estate agents
- Direct sales (if compensation is based on actual sales and not wholesale purchases or referrals)
- Builders and contractors
- Freelance writers and photographers (if contributes no more than 35 submissions to an outlet in a year)
- Hair stylists and barbers (if licensed and if can set own rates and schedule)
- Estheticians, electrologists, and manicurists (if licensed)
- Tutors (that teach their own curriculum, and that are not public school tutors)
- Commercial fishermen
- AAA-affiliated tow truck drivers
AB5 covers:
- Health care professionals (occupational therapists, speech therapists, optometrists, nurse practitioners, physician assistants, radiation therapists, licensed professional clinical counselors, marriage and family therapists, licensed clinical social workers, respiratory therapists, audiologists)
- Rideshare, delivery service workers, and other gig economy workers
- Truck drivers
- Janitors & housekeepers
- Health aides
- Performers and other entertainment professionals
- Land surveyors, landscape architects, and geologists
- Campaign workers
- Language interpreters
- Exotic dancers
- Rabbis and other clergy
[1] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
[2] https://www.dwt.com/blogs/employment-labor-and-benefits/2019...