Carve-Outs or Voter Initiative: What Will Fix AB5?

‘Will California Democrats be forgiven for AB5?’

Assembly Bill 5, authored by Assemblywoman Lorena Gonzalez (D-San Diego), has greatly limited Californians’ ability to work as independent contractors and freelancers. As many as 300 or more industries have been negatively impacted, and more than one million freelancers are now out of work in California alone.

Only one month after AB 5 went into effect January 1, 2020, the Legislative Analyst’s Office estimated that AB 5 had already hurt more than 1 million independent contractor and freelance working Californians.

Many acknowledge that the new law is likely the root cause for the flipping of CA-25 Congressional in the May 12 special election between Republican Mike Garcia and Democrat Assemblywoman Christy Smith. “Garcia’s victory could be attributed to the rage over AB5,” the Los Angeles Blade reported. And the LA Blade asked, “Will California Democrats be forgiven for AB5?”

California Globe has covered the State Capitol protests and rallies opposing AB 5, and interviewed many frustrated independent contractors and freelancers. They come from all walks of life and differing industries, from the music and entertainment industries, to hearing impaired and language interpreters, to medical doctors and nurses. Many are adamant that the next election will find a significant number of Democrats voting with and for Republicans in California. And the reason is simple: “Democrats passed AB 5 and the governor signed it into law. When we went to Democrats for help, they refused. Only Republican lawmakers are helping us get our jobs back,” several freelancers told the Globe in March.

Assemblywoman Gonzalez, who aspires to become the next California Secretary of State, has been hastily cutting all kinds of industry carve out deals to appease millions of angry musicians, artists, entertainers, journalists, interpreters, medical professionals, and many more independent workers. But the flawed bill is not fixed, by any means, especially with Gov. Gavin Newsom budgeting more than $20 million in the state budget for enforcement for violations of the new independent contractor rules.

“Garcia’s victory could be attributed to the rage over AB5, a labor bill authored by Assemblymember Lorena Gonzalez of San Diego intended to stop large employers such as Uber and Lyft from denying worker rights and benefits to their gig employees,” the LA Blade reported. “It also grossly limited work for freelancers and independent contractors.”

The LA Blade linked and quoted from a recent California Globe article. “A serious revolt ensued with the range of workers in the service, entertainment and hospitality industries coalescing with freelancer writers and photographers to agitate to repeal AB5.”

The Blade is correct.

At issue most recently was Senate Republican Leader Shannon Grove’s Senate Bill 806 to repeal and replace AB 5 with a new independent contractor test, which supports much more worker freedoms, and saves business-to-business relationships.

Grove’s bill was heard recently in the Senate Labor Committee, where despite her assurances that the bill will cover all workers, unlike those with carve outs, Democrats killed the bill.

“Carve outs don’t comply with the law,” Grove explained. “SB 806 will protect workers, freelancers and independent contractors and will not create confusion and carve-outs.”

First freelancers and independent contractors were denied carve-outs. Then under mounting pressure, Gonzalez began whittling away at her own bill, carving out certain industries amenable to union deals.

“Assembly member Lorena Gonzalez felt the heat and on May 20, moved bills to fix AB5,” the Blade reported:

“’They were right. I was wrong,’ Fred Topel of California Freelance Writers United tweeted Gonzalez as saying as she introduced AB2257, a carve out for writers, musicians and others. AB2257 and AB1850, a bill with exemptions for other professions, both passed the Labor Committee and are headed to Appropriations where obstacles await.”

“Asked about the political drama over AB5, out LA County Democratic Party Chair Mark Gonazlez said: ‘Like everyone, we’re monitoring the progress of AB2257 and support anything that’s going to have a positive effect on independent contractors.’”

But Republicans and Garcia seized the issue and tirelessly demanded a repeal. In response, as California Globe editor Katy Grimes reported, Democrats were smug, fixes and carve outs were denied, and independent workers demeaned during the Senate Labor Committee hearing for Senate Bill 806 authored by Senate Republican Leader Shannon Grove (R-Bakersfield).

“Perhaps the most egregious and condescending comments of the hearing came from Senator Hannah Beth Jackson (D-Santa Barbara), who claimed that when people (independent contractors) say they’ve lost their jobs, they don’t really mean it – that’s it’s businesses which just don’t want to hire them properly,” Grimes wrote. “Jackson, burnishing her credentials as a tone-deaf political elitist, said freelancers, gig workers and independent contractors are only angry about the job losses because the law is ‘taking away the lollipop they had to work when they want.’”

AB 5 is not fixed – not even close. App-Based Drivers with Uber, Lyft and Doordash just qualified a ballot initiative proposition protecting the choice of one million app-based drivers to earn income as independent contractors while providing new earning guarantees and benefits. The timing could not be more exact as App-based food and grocery delivery and rideshare drivers are currently providing essential services delivering food and medicines to seniors and families who are forced to stay in their homes, helping restaurants survive, and providing easy access to earning opportunities for struggling Californians who have recently lost income or jobs, Protect Drivers and Services reported.

In addition to Sen. Grove’s AB 5 fix, several Republican lawmakers have introduced legislative fixes, including a full repeal or suspension of AB 5:

New Resolution to Terminate California Governor Gavin Newsom’s Emergency Powers: Assemblymen Kiley and Gallagher take issue with Newsom’s 39 Executive Orders, unilaterally changing 200 laws.

Senator Moorlach’s SB 990 Would Suspend Freelance Job Killer Assembly Bill 5

Assemblyman Kevin Kiley to Initiate Vote on Bill to Temporarily Suspend AB 5

Protect App-Based Drivers and Service reported:

A recent study by the Berkeley Research Group found that taking away the ability of app-based drivers to work as independent contractors — instead forcing them into an incompatible and inflexible employment model — would eliminate up to 900,000 app-based jobs, a reduction of between 80-90% of drivers currently driving today. These job losses will come at the worst possible time when California is facing high unemployment and when app-based work opportunities will provide a lifeline for people to earn income.

The report’s key findings:

• More than 1 million Californians logged on to the platforms to earn income totaling over $6 billion in 2018.
• An employment model will reduce the number of app-based drivers needed to satisfy consumer demand by 80-90 percent.
• Based on 2018 numbers, an employment model would reduce the number of available work opportunities in the on-demand sector by 900,000, stripping Californians from all walks of life from the earning opportunities they need now more than ever.

The report also found:

• Approximately 80 percent of all drivers work fewer than 20 hours per week, and most of them work less than 10 hours per week.
• Approximately 70 percent of all drivers work fewer than 20 weeks a year, and most of them work less than 5 weeks per year.^[1]

“One million California app-based rideshare and delivery jobs are under attack by state politicians,” said Dave Thomasson, a professional musician from Covina who also drives rideshare. “Their laws threaten to eliminate these jobs and take away our ability to choose independent work. This ballot measure will protect this critical work that’s being threatened by out-of-touch politicians.”

More of California Globe’s coverage of AB 5:

More Than 150 Ph.D. Economists and Political Scientists Call for Gov. Newsom to Suspend AB 5 and Re-Open the Economy

Gov. Newsom Still Won’t Suspend AB 5, Even as it Continues to Kill Independent Healthcare Jobs

AB 5 Making Coronavirus Crisis Worse in California’s Rural Areas Lacking Independent Healthcare Contractors

California’s AB 5 kills off 40-year Lake Tahoe Music Festival

California Legislature Rejects Asm. Kiley’s Effort to Suspend Harmful Economic Impacts of AB 5

On The Heels Of AB 5, Congress Proposes Bill To Overturn ‘Right to Work’ States