California Assembly Moves to Loosen Gig-Worker Law
by Tiffany Stecker, Bloomberg Law
The California Assembly passed the two bills June 11 and now await action in the state Senate.
Photographer: David Paul Morris/Getty Images
Some freelancers pushed back against classification law
Bill exempting some independent contractors goes to Senate
California is one step closer to changing its landmark worker classification law to exempt a number of professions, such as freelance journalists, musicians, and photographers.
The Assembly voted unanimously Thursday to advance two bills, A.B. 1850 and A.B. 2257, to the Senate. A.B. 1850 passed 73-0 and A.B. 2257 passed 70-0. The upper chamber has until Aug. 31 to send the bills on to Gov. Gavin Newsom (D) for his signature.
The bills would allow self-employed professionals in creative industries—as well as certified translators, promoters, and others who typically work for several employers on a contract basis—to maintain the independent status that they say is necessary to their livelihoods. The measures are an olive branch to freelance workers and musicians who were among the most vocal critics of A.B. 5, the worker classification overhaul law enacted last year.
Assemblymember Lorena Gonzalez (D), the author of all three measures, said she has held “countless” meetings with groups and workers on the two new bills.
Gonzalez wrote A.B. 5 to strengthen protections for gig workers, who are often exempted from labor regulations. But it faced significant backlash from freelance workers who said the law would lead to fewer work opportunities.
California Freelance Writers United, a coalition of freelancers who oppose A.B. 5, supports the proposed changes. In a statement, the group said the legislation provides a better definition for the circumstances under which a journalist, writer, editor, or photographer should be classified as an independent contractor.
A.B. 5 set a new three-factor “ABC” test for determining worker classification. The test generally presumes a worker to have employee status unless the employer can prove all three criteria—that the person is free from control of the company that’s hiring them, that the service provided is outside the company’s usual course of business, and that the person is customarily engaged in an independent trade or occupation.
The law codified the California Supreme Court’s 2018 Dynamex Operations West, Inc. v. Superior Court decision and required the reclassification of Uber Technologies Inc. and Lyft Inc. drivers, freelancers, and other independent workers as employees. Such a reclassification provides new worker protections and imposes employer obligations related to workers’ compensation, unemployment insurance, minimum wage, and overtime pay requirements. The new bills seek to address the concerns of some of the independent contractors and companies who oppose A.B. 5.
A.B. 1850 would affect freelance journalists and photographers, as well as insurance inspectors, translators, competition judges, appraisers, and other professionals. It would apply the previous classification standard established in the state Supreme Court’s 1989 decision in S. G. Borello & Sons, Inc. v. Department of Industrial Relations, which centers on whether the employer has the right to control the manner and means of performing the work. A.B. 5’s requirement that work must be out of the ordinary course of business is a difficult hurdle for many employers who want to hire independent contractors.
A.B. 2257 would apply the Borello test to many working in the music industry, including performers, sound engineers, composers, and marketers. It would not apply to performers at theme parks, at large festivals, in orchestras, in a musical theater production, or on tour.
California Republicans say A.B. 5 creates a rigid employment model that hurts small businesses, gig workers, and contractors. Assemblymember Jay Obernolte (R) said the exemptions are “modest improvements,” but that more must be done to allow flexibility for small companies.
“Thirty years ago, I started a company out of my college dorm room; I can tell you with 100% certainty I would not have been able to do that had A.B. 5 been the law of the land,” Obernolte said.
(Corrects June 11 story to fix description of the ABC test in the 7th paragraph. An earlier correction removed interpreters from the list of covered professions under A.B. 1850 in the third paragraph.)
To contact the reporter on this story: Tiffany Stecker in Sacramento, Calif. at tstecker@bgov.com
To contact the editor responsible for this story: Karl Hardy at khardy@bloomberglaw.com