By Chloe Veltman, originally published by kqed.org
Comedian Dhaya Lakshminarayanan is one of the many California artists and entertainers figuring out how to adapt to AB5, a piece of legislation that will upend the last decade's gig-economy labor practices. (Kearny Street Workshop)
Like many artists, comedian Dhaya Lakshminarayanan juggles multiple roles to make a living. “We've always sort of pieced together a tour, submitted a script, did a web series or a paid gig for Intel,” says Lakshminarayanan, who lives in San Francisco and performs all over the country. “And then we go and do a ten-dollar-tip-jar show.”
Since Governor Gavin Newsom signed Assembly Bill 5 (AB5) into law in September, many California contractors—particularly those who work regular shifts for a single company—have shown up at rallies in support of the legislation. The new law, which will reclassify many former freelancers as employees when it takes effect on Jan. 1 next year, will grant more benefits such as paid sick leave, overtime and expense reimbursement to workers across the state.
Yet it’s still unclear how the law will affect artists and entertainers like Lakshminarayanan, who do all kinds of gigs for all kinds of clients, and whose practices don’t always align with the legal requirements of an employer-employee relationship.
AB5 came from an effort to prevent employers from skimping on employee benefits, as the gig economy redefined Americans’ relationship to the workplace in the last decade. While targeted at ride share companies such as Uber and Lyft, this overhaul of California labor law comes with unintended consequences for other types of industries that, let's face it, also thrive on cheap or even free labor to function, including arts organizations. Many arts institutions and freelance artists alike now find themselves in a state of confusion about how they will continue to do business come next year.
Supporters of ride share drivers from Uber and Lyft hold a sign during a protest in front of Uber headquarters on May 08, 2019 in San Francisco. (Justin Sullivan/Getty Images)
Even though she doesn’t see much upside to the legislation for her own situation, Lakshminarayanan supports AB5 in principle. She says it will provide more stability for the many artists she knows who work side jobs for extra money.
“For comedians who use Uber and Lyft as their ‘day job’ while they're trying to make it, I think AB5 is really beneficial, because you're looking for some stability and benefits,” she says. “You can't have two jobs where you're struggling with both of them.”
Other cultural workers in the Bay Area are expressing anxiety around the incoming bill. Musical theater composer and lyricist Ron Lytle says he feels like he’s in the dark about how to conduct his business going forward. “I'm concerned about my future as a small independent who needs to produce demo recordings and albums to promote my work,” says Lytle. “I engage orchestrators, singers, musicians and studio engineers, which are necessary to produce a show or record an album. Without these tools, I can't license my shows.”
There’s also the issue of how AB5 will affect creative workers’ control over their intellectual property. “When you are an employee, your employer has the right to your intellectual property,” says Julie Baker, executive director of the statewide arts and culture advocacy group Californians for the Arts. “So that's a very important aspect of why many artists and creatives want to remain independent contractors.”
Under AB5, in order to legally work with artists as freelancers, employers have to prove that they don’t control or direct the freelancer’s work, the freelancer is an established contractor in their field and that the freelancer performs work that lies outside an employer’s main line of business. The first two requirements are often easier to satisfy than the third. If the freelancer performs work similar to the employer’s main line of business, they may be covered by one of the law’s 50-plus exemptions—as long as they meet another specific set of criteria, including maintaining a separate business location, having a business license and negotiating their own rates for the services performed.
The complicated legislation is confusing even for labor experts. Lakshminarayan says if she is asked to become an employee to continue working for any of her clients, she plans to form her own limited liability company (LLC) to continue operating as a freelancer. “Create an LLC, and then you can be your own entity that collaborates with other artists,” she says. “Lots of comedians have done that.”
The new legislation isn’t just causing concern for individual artists. Baker says AB5 is a burden for the state’s cultural sector as a whole, which accounts for 7 percent of the state’s economy, according to the U.S. Bureau of Economic Analysis.
“Our industry is mostly run by nonprofit organizations with small budgets,” says Baker. “They mostly operate on a seasonal, performance, exhibit or classroom model. They do not generally fit into standard employment models.”
Berkeley Repertory Theatre’s managing director Susie Medak says she cannot see any advantages of AB5 to California’s creative industries. “We have to figure out how to apply standard work rules to people who don't spend all their time working for us, whose work is not clearly defined and whose collective bargaining agreements allow them to work in less structured ways,” says Medak. “It's terribly complicated.”
Julie Baker (left) leads a workshop on AB5 on behalf of Californians for the Arts. (Toyin Moses))
But some arts organizations have a more favorable view of AB5, and have even already taken steps to comply with the incoming legislation. The Oakland Museum of California is increasingly looking to temporary staffing agencies to fill jobs that might have previously gone to contractors.
“It actually opened the door for more people to think about museums as a career opportunity,” says the museum’s human resources director, Ayanna Reed. “So it created a more diverse workforce for us.”But Reed also says complying with AB5 is likely to be costly and time-consuming for her organization, and could make many former freelancers feel like they’re making less money. “We're paying for worker's comp, we're paying unemployment—all of those things that AB5 set out to protect individuals with, and that's wonderful,” Reed says. “But that means we're also not paying that higher hourly rate that they would have received as an independent contractor.”
There are other gray areas with how AB5 is going to work. The legislation’s long list of exemptions includes “fine artists.” However, there’s fuzziness around what that category actually means. The bill’s author, California Assemblywoman Lorena Gonzalez, isn’t clear on who fits into the category.
“Obviously, a muralist is a fine artist,” she says. “A musician is a fine artist.”
In fact, there’s currently no AB5 exemption specifically for musicians. Music industry advocates are among the strongest voices lobbying state lawmakers to tweak the new legislation to better suit their needs. Lobbyists say the definitions may end up being worked out in court.
Gonzalez says she is continuing to clarify how the law applies to musical artists and discussions with the unions and the industry are ongoing.
The legislative session starts in January, so no further changes to the law can be made before the end of 2019.
She says she is open to adapting the law in the future.
“I think as our world changes, the definition of a fine artist changes,” she says. “This is going to be an ongoing discussion.”