California’s Draconian AB-5 Law Should Be Debate Topic #1 for Gov. Newsom

When Gov. Gavin Newsom faces off with Florida Gov. Ron DeSantis at the upcoming Fox News debate on Thursday, November 30, Newsom should be made to answer for the countless flagrant fiascos of his own making in California — not the least of which is the disastrous anti-independent contracting law, AB 5 (Assembly Bill 5).

Although Newsom’s list of bad policy decisions is long and growing longer, AB 5 ranks as the most destructive and reckless bill ever to become law in California. Signed by Newsom in 2019 and enacted in January 2020, the onerous law has shattered the careers of hundreds of thousands of Californians across a vast swath of professions — everyone from transcriptionists, pharmacists and forensic nurses, to translators, event producers, wedding planners, tutors, court reporters and independent owner-operator truckers, to name a few. 

This burdensome law, with its strict ABC worker classification test, is also wreaking havoc on entire sectors including community theaters, indie filmmakers, nonprofit arts groups, and the wellness profession. 

Regardless of exemptions granted to favored professions, AB 5 imposes a minefield of restrictions on typical contracting relationships. Carve-outs come with caveats and fine print, as is the case with the freelance photographers’ exemption, for example. 

During his recent trip to China, Newsom likely violated his own AB 5 law when hiring former White House freelance photographer Charles Ommanney to take “presidential” glamour shots of the trip. According to Politico, Ommanney, who has been freelancing for Newsom for more than five months, receives no photo credits for his work with Newsom, and is directed when and where to shoot. Per AB 5, a freelance photographer must be able to set his or her own hours otherwise the arrangement violates the “control and direction” restriction of AB 5 and therefore misclassifies the independent contractor. Additionally, the individual cannot be restricted from distributing, licensing or selling their work product to another business. 

If Newsom was treated like any other business owner in California, the Employment Development Department (EDD) would target him for misclassifying his freelance photographer. As the hiring entity, he would face an aggressive payroll tax audit resulting in robust fines, penalties, back taxes, wages and unpaid benefits. Additional civil penalties could include fines of $5,000 to $25,000 for willful misclassification. There’s also a $10,000 fine for failing to provide workers’ compensation coverage, not to mention potential fines and penalties imposed by the Division of Labor Standards Enforcement.

Given that California’s EDD is now structurally insolvent due to its botched pandemic response, the department has every incentive to ramp up ruthless audits on small businesses everywhere — including moms-and-pops and solopreneurs — for the “crime” of using an independent contractor here or there. The audits can drag on for years and the attorneys’ fees alone can be enough to put a small businessperson out of business.

An archive of testimonies from the Facebook group “Freelancers Against AB5” documents hundreds of stories of destruction exposing the big-picture collateral damage AB 5 has inflicted on everyday Californians who are just trying to make a living. Sadly, AB 5’s ripple effect also disproportionately harms the most marginalized groups including seniors, the disabled, immigrants and single moms.

Meanwhile, the Biden Administration’s Department of Labor (DOL) will soon finalize a new rule under the Fair Labor Standards Act that will restrict independent contracting nationwide. Mimicking California’s ABC test, the impending six-factor rule — 184-page long — threatens the livelihoods of more than 70 million Americans who choose self-employment as a career or as a side gig to supplement their income. 

When the DOL rule is unveiled, Biden’s Acting Secretary of Labor, Julie Su — who endorsed and enforced AB 5 when she was Newsom’s labor secretary in California — will have to defend the new regulation inspired by her home state’s heavily regulated labor policies. 

Should Newsom become the Democrats’ nominee for President (as he apparently wants to be), he will also need to defend the DOL rule, as well as the myriad dumpster fires and debacles currently taking place in California, including the perpetual dumpster fire of the draconian AB 5 bill that he signed into law.