Independent contracting allows workers freedom and control of how and when they work. Many say under AB 5, their liberty and freedom has been taken away.
Since Assembly Bill 5 became law January 1, 2020, millions of freelance and independent contractors’ jobs have been killed. And at a time when California needs all hands on deck during the coronavirus crisis, AB 5 is also preventing desperately needed health care and medical professionals who are independent contractors, from working.
Assembly Bill 5 by former labor leader Assemblywoman Lorena Gonzalez (D-San Diego), has significantly limited Californians’ ability to work as independent contractors and freelancers – ironically at a time when millions of Californians are confined to home by the state government. AB 5 also randomly limited freelance writers and photographers to 35 submissions annually per media outlet, and has served to quash the independent contracting jobs of important health care and medical professionals’ during the coronavirus crisis in California.
AB 5, as written by Gonzalez and the AFL-CIO, also picked occupational winners and losers by exempting many different occupations from the requirements of the bill. It was revealed during Senate debate in September that the AFL-CIO wrote AB 5.
Millions of Californians who are independent contractors, gig economy workers, and freelancers, have been calling on Governor Gavin Newsom to use his Emergency Powers to suspend Assembly Bill 5’s restrictions on independent contracting during the COVID-19 crisis.
Sen. John Moorlach (R-Costa Mesa) has a fix – suspend AB 5 altogether, rather than continue with favored industries’ carve-outs. Last week, musicians and music professionals received an exemption from the independent contractor limiting Assembly Bill 5 law, California Globe reported. “Musicians, who have been trying to get an exemption from the law since earlier this year, reached an agreement with Assemblywoman and AB 5 author Lorena Gonzalez (D-San Diego) and Assembly Majority Leader Ian Calderon (D-Whittier) to amend AB 5.”
Other industries have tried to negotiate carve-out deals behind the scenes, with some involved saying that part of the deal is an agreement to unionize. Several industries including rideshare companies, journalists and photographers, and the trucking industry, have sued the state.
As the Orange County Register editorial board said, “If a law needs numerous exemptions to make sense, it probably doesn’t make sense.”
Moorlach amended SB 990 to read:
“Existing law requires a 3-part test, commonly known as the “ABC” test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification.”
“Existing law exempts specified occupations and business relationships from the application of the ABC test described above. Existing law, instead, provides that these exempt relationships are governed by the multifactor test previously established in the case of S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.”
“This bill would repeal these existing ABC test provisions and instead makes them operative on January 1, 2022.”
“AB 5 converted numerous consulting, and related professions, from independent contractor status to common law employee status, thus causing many businesses who retain certain individuals, whose skill sets were not specifically carved out in AB 5, to lose their business relationships,” Moorlach said. “Carving out certain industries shows a favoritism that should not be mandated in the state’s income tax code. Therefore, AB 5 is technically flawed and must be subject to a serious pause button.”
Moorlach also noted that demand for unemployment insurance benefits in California has reached historically high levels according the state’s Employment Development Department (EDD). Millions of unemployed Californians could potentially earn more as freelancers than unemployment checks provide if SB 990 passes.
AB 5 claimed another entertainment venue: the new law killed off the 40-year old Lake Tahoe Music Festival. “After 40+ years of classical music concerts offered outside with family and friends, the Lake Tahoe Music Festival will call a wrap to our summer festival with two performances in August of 2020,” the official festival website says. The Festival also posted the announcement on their Facebook page.
The California Legislative Analyst’s Office estimates that AB 5 has already affected more than 1 million independent contractor and freelance working Californians.
If enacted, SB 990 would immediately delay AB 5 until January 1, 2022.
Moorlach listed the thousands of jobs and industries negatively impacted by AB 5, including:
- ride sharing
- food delivery
- design services
- single truck owner-operators
- interpreting/translating services
- occupational therapists
- home repairs
- catering event planning
- lab technology
- hair and nail salons
- social work
- behaviorist health
- pet grooming
- pool cleaning
- food/hotel franchises
“I’m going to continue to pound the table until AB 5 is suspended,” said Moorlach. “Senate Bill 990 is a critical piece of legislation that should be enacted if Governor Newsom fails to act.”