SB 1403

SB1403:v98#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill

No. 1403

An act to amend Section 671 650 of the Unemployment Insurance Code, relating to insurance. employment.

LEGISLATIVE COUNSEL'S DIGEST

SB 1403, as amended, Strickland. Automobile insurance. Employee classification.

Existing law requires a 3-part test, commonly known as the “ABC” test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business.Existing law provides for a system of unemployment insurance providing benefits for persons unemployed through no fault of their own and exempts from the definition of “employment” for that purpose services performed as a real estate, mineral, oil and gas, or cemetery broker or as a real estate, cemetery, or direct sales salesperson, or a yacht broker or salesman, by an individual if certain criteria are met, including that the individual is licensed, as specified, or is engaged in the trade or business of primarily in-person demonstration and sales presentation of consumer products, including services or other intangibles, in the home or sales to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis, for resale by the buyer or any other person in the home or otherwise than from a retail or wholesale establishment.Existing law exempts specified occupations and business relationships from the application of the ABC test described above, including an exemption for a direct sales salesperson described in the above-described unemployment insurance exemption.This bill would revise the above-described unemployment insurance exemption to additionally exempt from the definition of “employment” an individual engaged in the trade or business of primarily person-to-person sales activities door-to-door, telephonically, or online or sales to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis, for resale by the buyer or any other person in the home or otherwise than from a contractually required retail or wholesale establishment.

Existing law generally regulates classes of insurance, including automobile insurance. Existing law prohibits an insurer that issues automobile collision or comprehensive automobile policies from refusing to issue a policy solely because of the age of the automobile to be insured, if the market value of that automobile exceeds $2,500.

This bill would make technical, nonsubstantive changes to that provision.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NO

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 650 of the Unemployment Insurance Code is amended to read:

650.

“Employment” does not include services performed as a real estate, mineral, oil and gas, or cemetery broker or as a real estate, cemetery cemetery, or direct sales salesperson, or a yacht broker or salesman, by an individual if all of the following conditions are met:

(a) The individual is licensed under the provisions of Chapter 19 (commencing with Section 9600) of Division 3 of, or Part 1 (commencing with Section 10000) of Division 4 of, the Business and Professions Code, Article 2 (commencing with Section 700) of Chapter 5 of Division 3 of the Harbors and Navigation Code, or is engaged in the trade or business of primarily inperson demonstration person-to-person sales activities, including demonstrations and sales presentation presentations of consumer products, including services or other intangibles, in the home home, door-to-door, telephonically, or online, or sales to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis, for resale by the buyer or any other person in the home or otherwise than from a contractually required retail or wholesale establishment.

(b) Substantially all of the remuneration (whether remuneration, whether or not paid in cash) cash, for the services performed by that individual is directly related to sales or other output (including output, including the performance of services) services, rather than to the number of hours worked by that individual.

(c) The services performed by the individual are performed pursuant to a written contract between that individual and the person for whom the services are performed and the contract provides that the individual will not be treated as an employee with respect to those services for state tax purposes.

(d) The amendments to this section made by the act adding this subdivision shall not apply to any provision that cross-references this section other than Section 2783 of the Labor Code.

SECTION 1.Section 671 of the Insurance Code is amended to read:

671.

(a)An insurer issuing an automobile collision policy, as defined in Section 660, or a policy for comprehensive coverage for an automobile, as defined in Section 11580.07, shall not refuse to issue the policy of insurance, or the policy in combination with other coverages, when the refusal is based solely on the age of the automobile to be insured, if the market value of the automobile exceeds two thousand five hundred dollars ($2,500).

(b)This section does not apply to any policy that includes coverage for losses resulting from wear and tear or from normal deterioration of an automobile or its component parts, nor to any policy that provides coverage for an antique or classic automobile.