It seems like everyone is searching for an exemption from California’s new law, AB-5. This law reclassifies many independent contractors as employees, entitling them to a myriad of rights such as paid time off, health insurance, and more. Some champion this as providing employee rights to workers, but others recognize the threat to gig work that this law poses. While some groups, such as Uber and Lyft, are bringing lawsuits in hopes of repealing the law by referendum in the November 2020 voting, others managed to get in before the law was in place and get an exemption which delayed the application of the law until a year later.
Ironic, isn’t it, that newspaper publishers managed to exempt their newspaper distributers from the regulations? Regulations, of course, that they champion if they did not affect their own business? While these companies figure out in the next year how to change their systems, freelancers find their livelihoods slipping away.
Just a few days ago, a federal judge ruled that the court will not allow the same temporary exemptions to freelance journalists and photographers that the newspaper distributers will enjoy. The judge refused the freelancers’ request, “saying they waited too long to challenge restrictions that they fear could put some of them out of business.” The freelancers may have not been as prompt as others to address the law, but they do not simply “fear” that AB-5 regulations will put them out of business, some have already lost opportunities for work because of it. Now they will have to wait through three months of losing work before their case is officially reviewed in March.
Under AB-5, freelancers are limited to 35 submissions per year to each media outlet. Recognizing how small that number is, some media outlets have already let go of freelancers, opting to hire a much smaller number of staff to replace them. Not only are hundreds of people out of work, these publications will suffer from the diverse viewpoints that freelancers offered. This issue extends beyond California as outlets outside of the state are deterred from buying the services of these freelancers because of the submission cap. Brian Dolan, the CEO and founder of WorkReduce, a company which matches freelance advertising and marketing professionals with companies says that
as a multi-state employer, it is an absolute pain to deal with the different regulations state-by-state. Anything that can be done to make multi-state employment more uniform is really good for the economy and starting businesses. When you have this piece-by-piece stuff, it just makes it harder and more expensive for companies to enter the market and limits competition.
So not only are freelancers out of work, AB-5 is hindering the American entrepreneurial spirit, as small companies which are relying on contractor work to get off the ground find themselves cornered by regulations and without options.
If I may go out on a limb here, just maybe there’s a problem with this new policy, if huge swaths of workers are rushing to seek exemptions to keep their jobs. The gig economy has provided countless jobs and the great flexibility that many workers seek. And yet these same workers find their livelihoods threatened. Worse yet, other localities appear eager to adopt similar bills, as New Jersey, New York, Colorado, Oregon and Washington are all considering similar legislation. While these laws have been cited as protections for “workers rights,” the only ones celebrating these laws are unions, not the workers who enjoyed their independence from these same unions.
In the meantime, the vague language of California’s AB-5 will continue to strike a wide range of occupations in the state, potentially sinking those that don’t manage to obtain exemptions.