What is AB5?
California Assembly Bill 5 (AB5)  was signed into law by Governor Gavin Newsom on September 18, 2019. The bill codifies the so-called Dynamex decision on the distinction between independent contractors and employees. The bill does not contain any explicit exemption for translators and interpreters. The full text of the bill can be found here: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5 .
Of particular interest is section 2, 2750.3. (a) (1) [boldface added for emphasis here]: “For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(A) The person 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 person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
The bill then lists a host of professions that are explicitly exempt from this “ABC-test.” Translators and interpreters are not mentioned at all anywhere in the bill. Subdivision (e), however, lists a generic exemption under certain conditions [boldface again added for emphasis below]:
“(e) Subdivision (a) and the holding in Dynamex do not apply to a bona fide business-to-business contracting relationship, as defined below, under the following conditions:
(1) If a business entity formed as a sole proprietorship, partnership, limited liability company, limited liability partnership, or corporation (“business service provider”) contracts to provide services to another such business (“contracting business”), the determination of employee or independent contractor status of the business services provider shall be governed by Borello, if the contracting business demonstrates that all of the following criteria are satisfied: …” This is followed by a list of criteria (A)-(L).
What does this mean for translators and interpreters and their collaboration with language agencies?
It is impossible to give a general answer to this question, since it obviously depends on the individual situation. When in doubt, please consult a lawyer.
However, some individual translators and interpreters in California have received notifications from language services companies (LSCs), both in and outside of California, informing them either that in light of AB5 the LSC will no longer engage any translators or interpreters in California, or that the LSC will only use California translators and interpreters who incorporate.
NCTA’s General Meeting on February 8, 2020, will feature a discussion on AB5. The presenter(s) will provide guidance on how attendees can do their part and share reports from colleague meetings with their local lawmakers. The session will also have a Q&A period. More information about the General Meeting and a link to RSVP can be found here. 
As a language professional you can advocate for redress of our interests through an explicit exemption. The Coalition of Practicing Translators and Interpreters of California  (CoPTIC) is dedicated to inform, educate and encourage a constituency-based advocacy. Please visit coalitionptic.org  to learn more. Their FAQ page  should answer a lot of questions.
The American Translators Association, ATA, NCTA’s parent organization, has issued a position statement on the situation in California.  ATA has also published a list with action items, resources and next steps for everybody who has been negatively affected by mandatory employee classification legislation. You can read the action plan here.  Finally, ATA has also issued a statement on the proposed California Senate Bill 875 (Exemption to AB5 for translators and interpreters). The current bill text can be found here.  ATA’s statement is available here. 
ATISDA, NCTA’s sister organization in San Diego, has also written an informative blog post on AB5 .
Finally, the California Labor & Workforce Development Agency has an extensive FAQ on its website  and also resources for employers and (potentially misclassified) employees.