Despite all the yapping that California Is a “model” for the rest of the nation, take it from a Native Californian: it’s getting a lot harder to live and work out here in the Golden State.
And since the beginning of 2020, it’s gotten really bad if you happen to be a freelancer.
Yep, it’s hell to be a gig worker in California today.
There are a lot of reasons for that, but the biggest one kicked in on January 1 when Assembly Bill 5 became state law. Based on a California Supreme Court decision, the law essentially mandates, with a few carefully crafted and politically-connected exceptions, that freelance or gig workers must be employees — whether they like it or not.
“Outrage” from a wide-range of workers
As the Sacramento Bee described it just this week:
“The new law … has generated outrage from a wide range of Californians, from musicians to therapists to truckers and freelance journalists.
It requires businesses to classify more workers as employees entitled to benefits like sick leave and overtime pay. But some workers affected by AB 5 say it’s caused them nothing but grief and anxiety. One online media company, Vox, parted ways with 200 freelance journalists rather than hire them as full-fledged employees. …
Supporters of the law say AB 5 extending benefits to “gig economy” workers means more of them are being treated fairly. But it’s having unintended consequences for organizations (such as the non-profit Sacramento Jazz Cooperative), leaving lawmakers scrambling this year to change the law.”
I know, know; you’re probably are wondering: what’s so bad about being an employee?
In my view, nothing … if you really WANT to be an employee. But there are a lot of people in California — like just about every Uber or Lyft driver I’ve ever ridden with — who want more flexibility and control over when, where, and how they work.
For a lot of different reasons, they like the freedom and autonomy that the gig economy brings them.
But AB 50 — which seems to be aimed specifically at Uber and Lyft — doesn’t only hit ride-share drivers, but also other freelancers in all sorts of professions up and down the state of California.
A new test for what constitutes a freelancer
That’s turned into a huge and, for the politicians who rammed this law through, somewhat unexpected problem for all sorts of people. It’s what they call the Law of Unintended Consequences.
Just this week, the San Francisco Chronicle asked, “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 all started because of 2018 State Supreme Court ruling known as the Dynamex decision. As a SHRM report made clear, “In the Dynamex decision, the court adopted a new test for determining whether a worker should be designated as an employee or independent contractor …”
Under the Court’s “ABC” test, a worker is presumed to be an employee unless the employer can show all of the following:
- The worker must be free from control and direction of the hiring entity;
- They must perform work outside the scope of the organization’s usual business; and,
- The worker must customarily be engaged in an independent trade, occupation or business of the same nature as the work performed for the hiring entity.
It is point No. 2 that seems to be causing the biggest problem, because lots of businesses in California (and elsewhere) employ a combination of both regular employees AND freelancers that do the same kind of work.
I used to pay a freelancer named Kris Dunn
Back when I was Editor of Workforce Management magazine and workforce.com, based in Irvine, CA., I had both fully-employed staff writers AND freelance writers who wrote for me. My five staff writers were based in New York, Washington, D.C., San Francisco, and Los Angeles, and they tended to write the larger and more complicated stories that we needed to have more control over.
However, five staff writers could only do so much — and we had a monthly magazine and website to fill. Because advertising was inconsistent (and seasonal), we often had specific months where we needed a lot more content, but hiring more staff writers for roughly 6-8 busy months a year didn’t make sense.
The answer was to assign some stories to freelance writers in the busy months, and in some really busy months, we paid upwards of $30,000 to freelance writers.
Well, that business model wouldn’t work in 2020 California, because AB 5 wouldn’t allow me to use freelance writers because what they did for me was NOT “outside the scope of the organization’s usual business.”
I have employed some great freelancers over the years, at a lot of different media companies, and I always tried to treat them fairly and paid them quickly. Rarely did any of them want a full-time staff job, and one of the very best freelancers I ever had was a lady who loved the flexibility her work gave her to earn a good living ($100,000 a year at the time) AND stay home to raise her kids.
And one more thing … I first started working with Fistful of Talent founder/Grand Poobah Kris Dunn back at Workforce Management around 2008 when he began writing for me as — wait for it! — a freelance columnist. If AB 5 existed back then, I would have never connected with Kris, and I probably wouldn’t be at FOT writing for you today.
AB 5 is spreading — and Congress has got it
Here’s my take: California has always been known as a place where social and legal trends take root before spreading elsewhere — both for better and for worse. But AB 5 is NOT one of those trends that the Golden State is famous for.
No, AB 5 is the infamous product of a former union organizer from San Diego who decided she didn’t really care about the unintended consequences for the working people she professes to care about when she rammed it through California’s one party controlled Legislature.
As a piece of legislation, it’s not very kind to freelancers and gig workers, and it ignores what most Uber/Lyft drivers tell me when I ride with them — they like the freedom and flexibility their gig gives them. It’s not just ride-share drivers who tell me that; I hear it from a great many other freelancers in other fields as well.
And like so many things that start in California, this one is already spreading.
It has been embraced by the U.S. House of Representatives as “a labor-championed measure, dubbed the PRO Act, that like AB 5 would enact more stringent worker classification standards” nationwide, as Politico puts it. And they add that in a nutshell it means we will see “fewer independent contractors and more employees, with the labor rights that entails” if it ever makes it into law.
Lots of trends start in California, but not all of them are good. This is one that America would do well to avoid at all costs.