[davinic]

Your friends could still be considered contractors under this law. One of the provisions that allows you to remain a contractor is that "the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed." The other prongs of the test have long been part of IRS law.

I work as a 1099 contractor doing software engineering under my own LLC consulting business. This is valid under CA law. The law is meant to protect people who are unfairly classified as contractors outside of a trade, not restrict choice of those of us already working in this capacity.