“AB5 pretends that the state knows better than we do in making those decisions.”
JoBeth McDaniel has enjoyed the perks of working as a freelance journalist since it helped pay her way through college in the 1980s. Her byline has been published in LIFE, AARP, Hearst Magazines, The New York Times, USA Today and more—always on her own terms.
That’s because McDaniel made a choice in her career, and with it, certain trade-offs. In pursuing a career as an independent contractor, McDaniel forgoes perks such as employer-sponsored health care, unemployment, sick and parental leave and more.
In return, McDaniel gets the ability to create and manage her own schedule. She completes her work on her own terms and avoids a 3-hour commute in the busy Los Angeles county. She doesn’t have to request time off for the doctor, to take a vacation, or to take care of a sick family member.
The flexibility has been a blessing. “I was fine with making that trade off of less money but more time to stay with my dad when he was dying,” she says. “There’s not a W-2 job out there that would have allowed any of that.”
Now in her 50s, McDaniels is watching a California mandate on independent contractors railroad her life. California Democrats passed Assembly Bill 5 (more commonly known as AB5), as a means of protecting workers rights throughout the state.
Advocates argue that by severely limiting the work independent contractors are allowed to perform, companies will be forced to hire contractors as full-time workers, providing them with health insurance, unemployment benefits and more.
But like McDaniel, not everyone wants or needs these benefits. Worse, instead of providing job security and benefits to California workers, AB5 is causing independent contractors throughout the state to lose jobs, income and entire businesses they spent years trying to build.
“There are all these very adult decisions that are at play when you freelance,” McDaniel says. “AB5 pretends that the state knows better than we do in making those decisions.”
Years ago, McDaniel tried a job with some of the benefits AB5 is telling her she needs. However, she quickly determined that type of career wasn’t for her. Teaching journalism at a local college, McDaniel says she was paid less per hour than any other job she’d had, but asked to do much more in terms of paperwork and everything surrounding it.
“That really opened my eyes,” she says. “A lot of people have this perception that W2 is better and that might be because they had a full-time W2 job with full benefits.” But a W2 part-time job with partial or no benefits, she says, is “absolutely worse” than a part-time job as an independent contractor.
When you are W2, you lose deductions for a home office, health insurance, training, essential equipment, and other expenses, in addition to losing the schedule flexibility of independent contracting. Most family caregivers and people with health issues are women. About half of independent contractors cite those two reasons for not being able to work at a traditional full-time W2 job.
As a journalist, McDaniel has been vocal in her opposition to AB5. But journalists, she says, “are just the tip of the iceberg.”
AB5 impacts independent contractors throughout the state who encompass a wide variety of occupations: translators, handymen, musicians, truckers, coders and more.
An estimated 36% of U.S. workers are involved in the gig economy, and the vast majority of these workers are independent by choice. With an economy now struggling and unemployment at a staggering high, the ability to work is more important than ever.
The Ripple Effects of AB5
AB5 has brought McDaniel’s passion project to a grinding halt. For years, she’s been working on a book and wanted to produce an accompanying podcast. She paid for podcast training and was prepared to hire independent contractors to help produce and edit her work. AB5 now prevents her from legally being able to do that.
After consulting with lawyers and people in the industry, she concluded, “I just can’t do it right now. The risks are too high.”
This leaves not only McDaniel out of work, but also, the contractors she had planned to hire.
“I just stopped all of it,” she says. “It was heartbreaking. I had put so much time into it.”
The topic of her podcast is very personal to her, and one Americans of diverse perspectives would appreciate. But because she’s still hopeful to one day pursue it, she asked that we not share details of it. We can share, however, that it’d be a shame for the story to go untold.
McDaniel’s podcast, like so many other projects and dreams, hinges on AB5 being overturned. Instead of waiting around for that to happen, she joined a lawsuit challenging AB5 in federal court, which is now in the appeals phase.
In fighting AB5, McDaniel isn’t just thinking about herself. She spent much of our conversation conveying what AB5 will do to all Americans, particularly working mothers. Bottom line: it will destroy opportunity.
“Self-employment is the American way,” she says. For the government to cut off that avenue and force people into jobs at big corporations instead of freelancing on their own terms, “it’s just anti-American,” she says. “It’s really sad.”
Do you have a story about how AB5 or similar independent contracting laws have affected your ability to work? Share your story here.