Thank you for sharing!

Your article was successfully shared with the contacts you provided.

The commercial real estate market, in many ways, dodged AB 5, a new California State law the substantially restricts the use of subcontractors. In addition to real estate brokers, the construction industry is exempt under the new law. With already steep construction costs, the exemption was a relief to the industry.

“It is possible that AB 5 may have less of an impact on the construction industry than other industries such as the gig economy because the law specifically exempts traditional construction subcontractor relationships from its reach,” Dwayne McKenzie of Cox, Castle & Nicholson, tells GlobeSt.com. “AB 5 states that the ABC test of the Dynamex decision does not apply to the relationship between a contractor and an individual who is performing work under a subcontract, so long as a number of specific requirements are all satisfied, including that the subcontract is in writing, that the subcontractor is licensed by the Contractors State License Board and that the work is within the scope of such license. The law also recognizes that other professionals in the construction industry, including architects, engineers, and lawyers, are exempt from the three-factor test.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

More from this author


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.