Impacts on BLS data of state laws on independent contractors

The U.S. Bureau of Labor Statistics (BLS) measures employment from two perspectives. One perspective is that of the employer, which is measured by business establishment surveys conducted by BLS and also by a census of employers. The other perspective is that of the worker, which is measured by a survey of households.

California

Effective January 1, 2020, independent contract workers in California could be reclassified as employees of companies because of the enactment of California’s Assembly Bill 5. These changes could affect many employers, including ride-hailing companies, trucking companies, newspaper publishers, and cleaning companies. How will this and similar changes in other states affect BLS measures of the economy?

The business surveys and census of employers could be subject to a potentially large change in payroll (wage and salary) employment. Because these workers are now employees of firms, they will be eligible for Unemployment Insurance (UI). These workers and their wages will be included in reports of employment and wages submitted by the employer to the California UI agency and in response to BLS surveys.

Current Employment Statistics (Establishment Survey)

The January 2020 Current Employment Statistics national estimates published February 7, 2020, will be the first affected by the California law; state estimates will be published March 16. According to the survey’s definitions of employment, California survey respondents affected by the change in law will be expected to include these reclassified workers as part of their January employment totals. The survey will not be able to identify separately the number of employers or employees affected by this law.

Quarterly Census of Employment and Wages

The California UI agency shares UI reports with the BLS Quarterly Census of Employment and Wages. This census measures of California payroll employment and wages affected by Assembly Bill 5 will be first published on August 19, 2020, representing the first quarter of 2020. This census also will not be able to identify the number of employers or employees affected by this law.

Current Population Survey (Household Survey)

The Current Population Survey estimates of total employment will be unaffected. Employment in the household survey is based on questions about whether people did any work for pay (or profit) last week and whether they have jobs from which they were absent. The answers to these questions should not change based on how work activity is classified under the law. This survey’s definition of employment status is in no way based on how an employee is classified under existing labor law. It is a measure of how people view their work activity. Other questions obtain more information about the nature of individuals’ work activity, including self-employment status. The estimate of the number of workers who are self-employed could change if the new law causes people to perceive their status differently. (Note that the monthly survey does not separately identify independent contractors or electronically mediated workers—that is, people such as rideshare drivers who find short jobs or tasks through websites or mobile apps.)

Local Area Unemployment Statistics

The Local Area Unemployment Statistics concepts and definitions come from the Current Population Survey, the household survey that is the source of the national unemployment rate. See the Current Population Survey section above for more information.

Other BLS data

Other BLS data products, like occupational employment and wages, job openings and labor turnover, employee compensation and benefits, employee safety and health, and productivity, also could be affected by the new California law.

BLS will update this page as new information is available.

Last Modified Date: February 5, 2020