Assembly Bill 5 (AB5) went into effect in California on January 1 amid much controversy. The bill was designed to combat worker misclassification and provide greater labor protections to gig economy workers such as Uber and Lyft drivers.
The bill has had unintended consequences on other types of contractors such as truck drivers, freelance journalists, make-up artists, and sound engineers by not allowing them to continue as independent contractors, even if that is their preferred status.
Instead, companies are expected to hire them as employees. Some companies have instead chosen to hire contractors from other states. Under the new law, freelance journalists may provide up to 35 pieces of content per client per year before being considered an employee, but they could not operate as a weekly columnist and remain their independent contractor status. Some other professions have no such exemption. Jay Obernolte of California’s 33rd Assembly District has introduced Assembly Bill 1925, which would allow businesses with fewer than 100 employees and gross receipts under $15 million over the last three years to continue hiring independent contractors.
The new law is murky to many people, but Nolo has an explainer on the job categories covered by AB5. A quick search of #AB5 on Twitter shows that many people are unhappy with this labor policy, because not everyone wants to be an employee.
Could gig-economy laws spread to other states?
AB5 is specific to California, but several states are considering similar labor legislation. For instance, Senate Bill (SB) 5513 and House Bill (HB) 1515 in Washington state concerns the employee-employer relationship. Both bills were in committee as of this writing.
New Jersey is considering its own labor regulations, which a group called Fight for Freelancers NJ has vocally opposed. A similar group in New York state opposes S6699A in the state Senate and companion bill A8721a in the Assembly.
Federally, Congress is considering amendments to the National Labor Relations Act that could impact contractors across the country.
Is your state considering legislation similar to AB5? Consider talking to independent contractors who might be impacted. If they can’t continue as a contractor, what are their potential employment prospects? Or is traditional employment not a viable option due to caregiving responsibilities, health issues, or other needs? Additionally, California Freelance Writers United and the American Society of Journalists & Authors (of which this writer is a member) have both opposed AB5 in California.
On the flip side, who supports these regulations and why? Are local labor unions backing this legislation?
A local professor of labor or employment law could help provide context on this issue as well.