On January 1, a law went into effect in California known as AB5 that is intended to reclassify many of the state's independent contractors as regular employees and give them the workplace benefits they deserve, such as unemployment and disability insurance. Perhaps even more importantly, as employees, these gig workers will have access to the full body of rights under labor and employment law. Without those rights, contractors — Uber and Lyft drivers, freelancers and other gig workers — are being exploited. As employees under the new law, it is hoped, they will enjoy job stability and decent wages. The unstated assumption of lawmakers here is that companies will simply comply with the law and convert those gig jobs into full-time positions.Uber and Lyft drivers. Postmates/Grubhub delivery drivers. Newspaper delivery people. Medical transcriptionists. Independent truckers. Translators.
The reality is less promising.
And don't forget about the freelance journalists I wrote about a week ago.
To use a made-up phrase from the Vietnam era, I guess AB5 has to destroy these people's livelihoods in order to save them.
Update, 1/14/20: Throw musicians into the mix:
However, the law has created a tangle of red-tape and administrative expense for large portions of California’s cultural sector.This is the state that fancies itself leading the country.
To illustrate: In 2019, San Jose Jazz presented more than 1,000 musicians across 326 different performances. The vast majority were independent musicians and singers from California, the nation, and around the world.
The U.S. Bureau of Labor Statistics defines musicians under code, 27-2042 Musicians and Singers. This is distinct from the category for Fine Artists, 27-1013 Fine Artists Including Painters, Sculptors, and Illustrators.
For some big name acts, we contract with their corporate agent and pay the agency for the band’s performance. However, for most musicians, we work directly with the band leader to agree on a price and terms, providing them payment as independent contractors. They, in turn, pay their band members in accordance with IRS Schedule C filing rules.
Under AB 5, we will be required to inform all U.S.-based musicians that they must now become employees of San Jose Jazz, or incorporate themselves before they will be allowed to perform for us.
If band leaders choose to pursue incorporation, they will then need to take on the responsibility of payroll and HR administration for the rest of their band.
Update #2, 1/16/20: People like this run California:
California Asm. Lorena Gonzalez (D-San Diego) authored the terrible anti-liberty bill, AB5, that effectively outlaws any kind of independent contracting. Tens of thousands of Californians have either seen all of their income immediately dry up or severely decrease as companies instead opt to contract with people in the 49 states where it’s not such a risky proposition for them to do business.There's video, and lots more, at the link.
As we covered previously, when confronted by Californians who have been severely harmed by her legislation, Gonzalez has displayed a condescending, communistic, “let them eat cake because it’s for the good of the collective” attitude. Though she’s been dragged on social media for nearly a month now, her “performance” during an interview on San Diego’s KUSI Friday night showed that she learned absolutely nothing from the experience...
Based on accounts of eyewitnesses in the station who were there with other interviewees that night, the atmosphere was extremely tense from the moment Gonzalez and her handlers entered the station. KUSI has been giving voice to a number of freelancers from various industries who have been harmed by AB5. Princess Lorena wasn’t too happy about that, resulting in a petulant outburst near the beginning of the 20-minute-long interview.
She started off by calling the interviewers liars after they introduced the story by saying they’d heard from thousands of people who had lost their “jobs” (contracts,really)...
I am a high school teacher for my "real" job. I also officiate HS sports (football and baseball) as an independent contractor. Our association of officials is trying to figure out if we fit into the classification of IC or not. The biggest question for us is who is the hiring entity? If it is the schools, we fit the ABC test of being IC's. If it is the association of officials or the assignor, we run into a major issue. The next few months will be interesting to watch the other gig jobs as well as get some clarification upon Youth and HS sports officials.
ReplyDeleteInteresting point!
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