“These politicians can say what they want about misclassifying…but the result is that lives are being destroyed, tangibly.”
Karen Anderson has been an independent contractor since the mid -90s. She started her own freelance business after working in the marketing department of a super-regional shopping center in Orange County, and was encouraged by the marketing director who believed in her abilities as a writer and creative individual.
Since then, Anderson has operated as a prolific freelance managing editor, writer and photographer for a variety of clients in Hawaii, California and New York. For seven years, she was the managing editor of a community business journal in Orange County, and for the last 13 years, she has worked as a managing editor, writer and photographer for publications focused on homes, architecture, interior design, food and travel.
Anderson sees the danger firsthand that AB5 poses to her livelihood and many others’. She explains: “AB5 affects my future, and my family. It has a detrimental effect on my family because it takes away opportunities for me to work independently while still taking care of my elderly mother in her home. And it will probably take away my ability to keep the house I grew up in, and prevent me from living out the rest of my life in California as I’ve planned it.”
With an elderly mom in her 90s, Anderson planned on having the flexibility to care for her mom once full-time care was needed. But AB5 threatens that, as it does for thousands of independent contractors who need flexibility so they can earn their livings at home while also caring for family members who rely on them.
To fight back against AB5, Anderson founded a Facebook group, Freelancers Against AB5, soon after it was signed into law in September 2019. The Facebook group has grown to almost 18,000 members and serves as an outlet to share information and tell the stories that the media ignores. Its members include hundreds of categories of trades, industries and professions.
“We’re career people,” Anderson said. “We’re professionals, we have businesses. We like what we do. We’re thriving. I was thriving. Throughout my entire career I’ve never had trouble getting clients. These aren’t side-gigs, this is my client roster.”
Anderson says that AB5 has affected workers of all ages, from seniors to college students, in a wide variety of occupations. She explains: “All these flexible options for Californians have been taken away from them by AB5.” The effects of AB5 have hit independent contractors particularly hard, especially with the arrival of the coronavirus.
Many supporters of AB5 argued that independent contractors would be able to find traditional jobs and be better off. But Anderson says that such an argument is not borne out by the facts. “This utopian notion that all of the sudden these independent contractors will be converted to traditional employees,” she says, “is just a fantasy.”
Instead of helping Californians and providing “workers’ rights,” AB5 has taken away the livelihoods of hundreds of thousands of Californians, forcing some to move out of the state. “Some of these people have just fled the state because it’s the only way to care for their loved ones while having worker freedom,” Anderson said.
In particular, independent contractors who are older will have trouble finding companies that would want to hire them as employees. Anderson has seen many of these stories. “AB5 is ageist against seniors who have long thrived as self- employed individuals,” she said.
“The lucrative freelancing opportunities we’ve enjoyed over the years have paid much more than a part-time W2 employee… who can’t write off office expenses, mileage and more.” She explains that she can write off her health insurance as well, which allows her to have the top-tier plans.
There’s been a ripple effect on small businesses, particularly mom-and-pop and single-owner businesses. Because of AB5, small businesses are getting audited for alleged misclassification violations. The state isn’t just going after the big companies like Uber and Lyft, they’re taking down the small businesses that rely on the flexibility of independent contractors to operate.
Many of these businesses, already suffering from the closures due to the COVID outbreak, will not be able survive after an audit. Anderson describes: “These misclassification audits, having to go through an audit during the pandemic, is like shooting a dead body. They’re already dead in the water, what more do they want from these businesses that are already barely surviving?”
Not only could these audits close many small businesses, the fines could amount to $200,000 and more. After putting them out of business, if the owners are unable to pay the fines and declare bankruptcy, the state could put a lien on their homes as well.
The performing arts, which have long flourished in California, are also suffering greatly. Countless small theater companies, non-profit arts groups, youth theaters and orchestras, dance theaters, specialty performers and festivals have been forced to leave the state or close their doors. Anderson says: “If people in California knew that the arts are being taken away from them because of this law, they wouldn’t stand for it.”
Even youth sports are impacted: umpires and referees have always been independent contractors. Other industries adversely impacted include independent film, weddings, trade shows and events.
While different groups, such as translators, videographers and journalists, have been lobbying for exemptions to AB5, Anderson likens some of the recent exemptions to “leaky lifeboats.” She says that these new exemptions appear to simply to take away the bad press and quiet the loudest voices.
“The proponents of the law are less interested in helping the low-wage, exploited worker, and care more about organizing workers into unions, as well as generating revenue to the state coffers via payroll taxes, LLC fees, misclassification fines, and more.”
Do you have a story about how AB5 or similar independent contracting laws have affected your ability to work? Share your story here.