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October 2019

Teaching Pros Under Fire

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By Ronnie Miles
Director of Advocacy
NGCOA

Golf courses around the country deliver golf instruction programs every day. This instruction is generally delivered by a golf professional. While many of these professionals are employed by the golf club, more and more clubs are augmenting the market’s demand by allowing independently contracted PGA professionals to use their facility.

This is a win-win for golf clubs and PGA professionals who desire the flexibility of not being employed by the clubs and offering their services at numerous locations to better meet their clients’ preferred location. These business arrangements have been in place for many years. But in California, the use of independent contractors may be a thing of the past.

Following a recent California Supreme Court decision in Dynamex Operations West Inc. v. Superior Court of Los Angeles, which cited the harm to a misclassified worker who loses workplace protection and the loss to the state of needed revenue from payroll taxes, payment of premium for workers’ compensation, Social Security, unemployment and disability insurance, prompted the state lawmakers to introduce legislation to codify the court’s decision.

On May 24, the California Assembly introduced AB-5 Worker Status: Employees and Independent Contractors, requiring employers to convert to regular employee status those independent contractors delivering services at their place of business.

How should you determine if you are an independent contractor? Currently, the DOL uses six-factor criteria better known as the “economic realities test.” Under AB-5, the California test requires “hiring entities” to establish: (A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, (B) the worker performs work that is outside the usual course of the hiring entity’s business, and (C) the worker is customarily engaged in an independently established trade, occupation or business. Only when all three elements are met may a company properly classify its workers as independent contractors.

Through the efforts of the newly formed California Alliance for Golf (CAG), sponsoring members of AB-5 have agreed to entertain expanding the list of excluded professionals to include Teaching Golf Professionals. NGCOA, along with PGA, GCSAA and WAG, has filed our letter with Senate and Assembly members requesting our Teaching Golf Professionals be included in the exemption list in the final bill. We recognize there are other independent contractors delivering services to our golf clubs that will be affected by AB-5.

On Sept. 11, the bill was approved and now goes before the governor. But hope remains. At press time, according to CAG representatives, the bill’s author, Assembly member Lorena Gonzalez, has agreed to include a “Letter to the Journal” that defines the role of the independent PGA teaching profession as coming under the terms of the “business to business for professional services” exception. If successful, this will be a bridge allowing for further adjustment during their 2020 legislative session. NGCOA will remain engaged as this bill moves forward. This decision can be expected to spread into other states that are looking for ways to raise revenue through expanded labor laws.

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