by Carolyn Said, SF Chronicle
Published February 10, 2020
Updated February 11, 2020
What do sheep shearers, rehab specialists, ventriloquists, medical transcriptionists, face-paint artists and test proctors have in common?
They’re among the many kind of workers who are mobilizing online, in public protests, and in letters and visits to lawmakers to say that AB5, California’s controversial new gig work law, is hurting their livelihoods.
“This law doesn’t just affect Uber drivers and truckers,” said Karen Anderson, a freelance writer, editor and photographer. Freelancers Against AB5, a Facebook group Anderson started in November, now has more than 9,000 members who share experiences about losing clients and assignments, being unable to hire assistants, grudgingly becoming employees, or, in some cases, going out of business entirely.
“Stories come pouring in every day for professions you’d never guess: cancer registrars, hull cleaners, rig welders, Santa Clauses, meeting/event planners, virtual paralegals, pharmacists, Pilates instructors, music therapists for children,” Anderson said. Anecdotes from more than 135 diverse occupations are chronicled by the group.
The freelancers’ activism has already yielded some results. On Thursday, AB5 author Assemblywoman Lorena Gonzalez, D-San Diego, said on Twitter that she would seek to remove an annual submission cap for freelance writers and photographers (who are suing over AB5), and will soon propose changes for musicians. Gonzalez, who said she’s held hundreds of meetings with affected groups and individuals, promised that more changes are coming soon.
But, she said in an interview, some fears are overblown. If freelancers have a business license — which San Francisco, San Jose and other cities require anyway, mandates that predate AB5 — and operate a sole proprietorship, they can rely on the law’s provision allowing businesses to work directly for other businesses, she said.
For instance, a bride could hire a makeup artist as an independent contractor, or a charity could hire a freelance harpist to play during a fundraiser.
The law’s ABC test is key. Someone can only be an independent contractor if (A) they do work free from the hiring entity’s control; (B) they do work outside the scope of the hiring entity’s business; and (C) they have an independent business doing that type of work.
So a makeup artist working at a MAC Cosmetics counter, for instance, would need to be an employee because the hiring entity is in the makeup business.
But irate and worried freelancers report seeing gigs vanish. They say out-of-state companies are blackballing Californians. The business-to-business exemption has not helped, some said.
“I received cut-off notices from my clients just before Christmas, and have already lost most of my livelihood overnight,” Ildiko Santana, a Hungarian-English translator and interpreter, wrote in a letter to Gov. Gavin Newsom that she shared with The Chronicle.
Miriam Lewis at the rehearsal space for the theater company for which she designs costumes. She’s concerned that AB5, California’s gig-work law, will lead to the closure of small theaters that are her customers. Photo: Chloe Aftel / Special to The Chronicle
Stephen de Ropp, a documentary cinematographer, said he structured his small business as a corporation “to avoid any shadow of a doubt with my clients that I could still freelance.”
But it didn’t always work. “My clients’ lawyers are so paranoid about the wording of the law that many are not even allowing for business-to-business contracts to be approved with my company,” he said in an email. “A majority of my business income is in jeopardy.”
AB5 and the Dynamex California Supreme Court decision it codifies make it harder for companies to classify workers as independent contractors rather than employees.
“These freelancers are feeling understandable pain, but pointing the finger in the wrong direction,” said Veena Dubal, a UC Hastings law professor and advocate of AB5. “It’s not the law (hurting them); it’s the employers who said they can’t do the simple thing of providing unemployment insurance and workers’ comp, so instead they’ll just stop using the freelancers.”
But many freelancers reject the pro-AB5 arguments that workers deserve the security and protections of employment and that companies exploit workers by hiring them as freelancers to cut costs. Those on the Facebook group say they make good livings and prefer the freedom to set their own schedules. They feel that employment — if it’s even offered — is too constraining or impossible for people with disabilities, single moms or those caring for ill family members.
Mary Beth Sasso has taught for three years at an arts center in Santa Rosa as an independent contractor paid $60 an hour.
“It was good money, and I loved doing it,” she said. To comply with AB5, she said, the center hired her and other teachers as employees, but cut her pay to $23 an hour because of the overhead of benefits and other expenses. “The scope of my job hasn’t changed, but that doesn’t matter,” she said.
At tax time, she said she’ll be limited on the deductions she can take for the employee work. (California companies must reimburse employees for business expenses, however, and the center is now paying self-employment taxes Sasso previously covered herself.) She fears that other teaching clients might drop her entirely.
The AB5 controversy highlights how laws are trying to catch up as the nature of work changes. Gallup says 36% of American workers, or 57 million people, make money through independent jobs — gigs — as either their primary or secondary work, including 29% whose primary endeavor is an “alternative work arrangement.”
Several Republican state lawmakers have introduced bills this month to roll back all or parts of AB5. The most sweeping is AB1928, which would revert the state to the previous, more-flexible test for employment, called Borello.
“Our goal is a full and immediate repeal,” said AB1928 author Assemblyman Kevin Kiley, R-Rocklin (Placer County), who introduced it as an urgency measure, which means it can go into effect immediately upon enactment. “This is an unprecedented situation where a single bill has deprived countless people in our state of their livelihoods. Let’s stop the bleeding and then debate what the ultimate form of the law should look like.”
He’s open to addressing “genuine misclassification” cases, he said, but also is seeking a constitutional amendment, ACA19, to reinstate the primacy of the Borello test. Even if the Legislature voted to place that on the ballot, it would not appear until 2022.
With Democrats holding supermajorities in both the Senate and Assembly, however, the chances of the Republican-backed anti-AB5 bills passing seem slim.
Small theater, dance and music companies are particularly struggling with AB5. Gonzalez proposed that the state create a $20 million fund to help subsidize their compliance, but it’s unknown whether that will happen.
Becky Davis, board president of Altarena Playhouse in Alameda, is forming a coalition seeking a grace period and separate criteria for performing arts groups.
“Most of these organizations were simply not adequately funded to comply with AB5’s drastic increase in employment costs on such short notice,” she said in an email. “These changes are increasing budgets anywhere from 15 to 40 percent to much more (one company cited a 1000% increase in artist fees if they were to reclassify artists as employees). These kinds of increases are devastating for a small-to-medium nonprofit.”
Miriam Lewis designs costumes for a theater company. Photo: Chloe Aftel / Special to The Chronicle
Miriam Lewis, who designs and constructs costumes for theaters as a freelancer during breaks from her job teaching costume design at San Francisco State University, said she’s very concerned that small theaters will go out of business.
“For me it will be an artistic hit,” she said. “I’ll lose my chance to continue to develop myself artistically, to have my design work seen by people and to participate in the world of arts that I love.”
While AB5 has numerous exemptions for professions like doctors, dentists, lawyers, architects, engineers and more, many freelancers say their occupations are so specialized that they’re unlikely to get off the hook.
“It was such good work (but) they just couldn’t afford me” as an employee, Dyer says of the equine therapy outfit where she worked. Photo: Kate Munsch / Special to The Chronicle
Renee Dyer, along with her three Arabian horses, Comet, Madonna and Jacki, had a dream gig working part time as the master horse handler for an East Bay nonprofit providing equine therapy for dementia patients.
“It was such good work, (but) they just couldn’t afford me” as an employee once AB5 took effect, she said. “They ripped my epaulets off.”
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid