Representatives, businesses grapple with AB 5, an independent contractor law
On Sept. 18, Gov. Gavin Newsom signed Assembly Bill 5, effectively changing what it means to be an independent contractor in California.
For many, AB 5 gives workers, who previously had no access to it, labor protections and benefits like unemployment insurance, health care subsidies, paid parental leave, overtime pay and a $12 minimum wage. Notably, the law has a number of exemptions for workers like physicians, surgeons, dentists, insurance brokers, accountants, architects and others.
Proponents of the law say it provides them necessary benefits that will improve their lives.
Those opposed to it say it disrupts their business model. Many freelance journalists are also upset about the new law as it allows them only 35 assignments per outlet per year. According to Vox, most media companies don’t like the law as they will be forced to partner with more freelancers, not use them at all or hire more journalists.
Roxanna Cohen, owner of and pilates instructor at The Pilates Place of Grass Valley, was originally opposed to the law. Cohen had used mostly independent contractors instead of part-time or full-time employees, as many workout and wellness facilities do.
She said the law was meant to target ride-sharing companies, not small businesses.
“I think that there’s a lot of collateral effect from it that people aren’t thinking about,” she said, adding that “People like being independent contractors because they have more freedom with their time.”
And although the law will be a burden for her business — having to pay for workers’ benefits and consequently raising her group classes by $2 — Cohen said there are things about the law she’s embracing. She said she’s excited about offering benefits to her workers. If one of them gets pregnant, for example, they will be able to get time off.
“I’m contributing to their Social Security, their disability, their workmen’s compensation, their paid sick leave — they’ve never had that,” she said.
Plus, she said, every business class she’s taken recommends that she has employees, not contractors, because their buy-in to the company is higher, as workers feel the weight of their contributions.
“Things run smoother,” she said, “you’re more cohesive as a team, people know what to expect.”
The added expenses to her business will be hard, said Cohen, but the added camaraderie, morale and opportunities for collaboration may be worth it.
Because of a battle in federal court, Nevada County resident Robin West said the law has not affected her yet as an Uber driver. On Jan. 9, a Los Angeles Superior Court judge ruled that the law doesn’t apply to truckers because of their protections under federal law, according to the Sacramento Business Journal. That decision is being appealed by a Los Angeles attorney.
West, a semi-disabled individual raising grandchildren and living in low-income housing, said driving Uber allows her to make ends meet. She’s generally against the law because if she’s not considered a contractor, West said she won’t be able to write off 58 cents per mile and will therefore earn too much to collect MediCal and food stamps. Disabled people, particularly those who drive Uber as a side gig, will be hurt by the law because they don’t have enough time to drive to the point of part-time or full-time employment, said West. She earns just under minimum wage as an Uber driver, but the cash helps her make ends meet.
“At the end of the day you can go buy groceries if you need to,” she said.
Some, like InConcert Sierra Executive Director Julie Hardin, don’t yet know how the law will affect them.
“We hire a lot of local and regional musicians for Sierra Master Chorale and orchestra concerts, educational performances as well as parties,” she wrote in an email. “Will we have to pay a one-performance musician as an employee? There are certainly more questions than answers at this point.”
A number of northern California representatives are opposed to AB 5, including Assemblyman Kevin Kiley, R-Rocklin. Kiley said the law is depriving people of their livelihoods, preventing them from practicing their professions.
“It’s been absolutely devastating,” he said.
Kiley said he’s received “thousands of submissions” about how the law has negatively affected professionals, including journalists and translators.
The law was not needed, said the assemblyman, noting that those advocating for AB 5 were powerful interest groups like conglomerate — not local — unions.
“(It’s) not designed to benefit workers, (nor was it) designed to benefit professionals,” he said. “It was designed to benefit special interests.”
Republican State Senator Brian Dahle, whose district includes Nevada County, agreed with the general sentiment, noting that AB 5 is hurting musicians and anesthesiologists.
Although “there are bad actors out there” exploiting workers, he said the law is too widespread.
“This is way too broad and way too cumbersome,” he said.
To contact Staff Writer Sam Corey, email email@example.com or call 530-477-4219.
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