California AB5 Bill

This law passed in 2019 and went into effect 1/1/20. It was originally created to allow gig workers for Uber and Lyft to earn benefits as employees of their company. As a result, it affected other independent contractors and requires companies to reclassify them as employees. There were some exceptions such as physicians, but of course nurse practitioners and physician assistants were left out of this list of exceptions.

Unfortunately, that means nurse practitioners can no longer practice in California as sole proprietors. We can only practice there as W2 employees. That means, even an agency that usually pays their travelers as a 1099 contractor, now has to pay their employees as W2 workers when they work in California.

This has created a lot of problems for nurse practitioners in California. Many providers prefer working as a contractor because you are able to deduct a lot of expenses on your taxes. Several agencies teamed up to advocate for nurse practitioners and have them added to the exemption list. So far this has been unsuccessful.

Since I was looking to work in California for the beginning of 2021, I was interested in working through an agency that pays us as 1099 contractors. For the reasons mentioned above, this won’t be the case.  And since the agency will have to pay me as an employee, that means less pay since they are required to offer benefits. It also means that they can no longer provide me with a housing stipend, but only a reimbursement.

For one assignment, I was originally being given a $3500/month housing stipend. I was planning on renting a place that cost $2500/month and pocketing the rest. This will no longer be possible since the agency is converting all contractors to employees by 1/1/21.

Hopefully nurse practitioners can be added to the exception list eventually because this is such a disappointment and will defer myself and other nurse practitioners from practicing there in the future.