Musicians, translators, interpreters, writers, photographers and dozens more professions won exemptions from AB5, the state’s new gig-work law, with Monday’s passage of a cleanup bill, AB2257.
People in those occupations now can continue to operate as self-employed professionals if they qualify under an earlier standard, rather than being subject to AB5’s strict rules that make it much harder for workers to be independent contractors rather than employees.
The bill sailed through both the Senate and Assembly without opposition Monday.
Gov. Gavin Newsom’s office did not answer questions about whether he will sign the urgency bill, which would take effect immediately. In a news conference last week, Newsom said: “I anticipate again, having the opportunity to sign that bill very, very shortly.”
Assemblywoman Lorena Gonzalez, D-San Diego, who wrote both AB5 and AB2257, said the clean-up bill tries to address the needs of people who are legitimate freelancers while making sure that companies don’t exploit workers.
AB5, which is based on a 2018 California Supreme Court decision called Dynamex, says that workers can only be independent contractors if they meet three conditions: A) they work free from a hiring entity’s control, B) they do work not central to the hiring company’s main business, and C) they have independent enterprises doing that type of work.
“We tried to ensure that true independent contractors can operate as such without violating the principles of Dynamex,” Gonzalez said.
The cleanup bill allows freelancers to work through intermediaries in some circumstances without having to become employees.
New exemptions from AB5
AB2257 exempts a lengthy list of professions from AB5’s strict rules about who can be a freelancer. People in the following occupations can continue to operate as self-employed professionals, if they qualify under an earlier standard called Borello.
Musicians (with some exceptions), translators and interpreters, still photographers, photojournalists, videographers (with some exceptions), photo editors, graphic designers, web designers, tutors, consultants, youth sports coaches, caddies, wedding or event planners and vendors, handypeople, movers, dog walkers and groomers, pool cleaners, insurance underwriters, manufactured housing salespeople, competition judges, landscape architects, performers teaching master classes, foresters, real estate appraisers and home inspectors, feedback aggregators.
Source: California Legislative Information website
“Referral agencies can exist but not for dangerous jobs; you can’t avoid workers’ comp by calling yourself a referral agency,” Gonzales said.
Agencies that help freelancers connect with clients and handle payments without doing any supervision can operate without becoming employers. Event planners and wedding planners, for instance, can hire florists, makeup artists and musicians without becoming their employers. Likewise, one sole proprietor doing business with another is exempt.
AB5 is a flash point for controversy. Many freelancers said it jeopardized their livelihoods; some say that AB2257 does not do enough to help them. Republicans attacked it as a rigid law that hurts small businesses. But the bill’s backers, led by organized labor, said it was necessary to address rampant misclassification that exploits workers and gives companies unfair advantages when they duck the costs of employee benefits.
Many Republican senators spoke out against AB5 during Monday’s session and said they were voting for AB2257 because getting additional exemptions to AB5 was better than nothing.
AB5 “harms scores and scores of people from the livelihoods they chose,” said Sen. Pat Bates, R-Laguna Niguel (Orange County). Sen. Melissa Melendez, R-Lake Elsinore (Riverside County), said she’d heard from many people “in tears, saying they don’t have a job now” because of AB5.
AB5’s biggest impact is untouched by the cleanup bill. It targets gig-work companies such as Uber and Lyft, which built their business model around hiring freelance drivers. California and some cities are trying to enforce AB5 against the ride-hailing companies through lawsuits. Meanwhile, Uber, Lyft and three other gig-work companies have poured over $200 million into Proposition 22, a measure on the November ballot that would exempt them from AB5, keeping their drivers and couriers as freelancers.
Musicians, the folks who coined the word “gig,” had said their industry would be devastated by AB5. Under agreements worked out this spring among record labels, music unions and other industry representatives, they can continue to freelance as they always have. The exceptions are those who work in areas that generally already employ musicians as employees, such as symphony orchestras and live performances before large audiences.
Interpreters and translators, who often are hired through third parties, expressed relief. A wide range of interpreters and translators, including those who work in American Sign Language, medical environments, courts and administrative hearings, and conferences were all exempted.
“We wanted to make sure that the language was amended … so that we could continue to work through referral agencies and as businesses consistent with the nature of our profession,” said Angie Birchfield of Santa Clarita (Los Angeles County), an interpreter for 30 years.
Freelance writers, photographers and videographers, who filed a lawsuit against AB5, were only partially satisfied. The new bill removes a previous cap of 35 submissions a year for writers and photographers. But it still imposes limits on videographers. While those are largely related to the motion picture industry, industry professionals said the effect will be chilling, as many writers and still photographers often take some video as part of their assignments.
“Many freelance writers are expected to be multimedia journalists, and it’s crucial for us to be able to legally record video for our clients,” said Randy Dotinga, a freelance writer who is former president of the American Society of Journalists & Authors. “It’s a First Amendment matter, too.”
That’s why the lawsuit will continue, said Dotinga, who spearheaded the legal action.
“We are pleased that it reopens the door for many still photojournalists to do their important work in a year where their voices are critical, but we remain disappointed that it ultimately leaves television photojournalists with an inability to freelance, and unconstitutionally discriminates between freelancers based on the content of their speech,” said Alicia Calzada, deputy general counsel for the National Press Photographers Association.
Other interest groups said they still hoped to get AB5 overturned.
Karen Anderson, a freelance writer who runs the Facebook group Freelancers Against AB5, which has 18,600 members, said that many freelancers had already lost clients who were afraid to hire California contractors.
“Some of those jobs and clients are never coming back,” she said.
The cleanup bill’s wording is still ambiguous, she said, so some out-of-state companies will remain leery.
“Because it’s so complicated, it makes independent contractors radioactive whether they’re exempt or not,” she said. “A lot of companies will decide they can avoid all these pitfalls and contract with independent contractors from other states.”
A related bill, AB323, which extends a Dynamex exemption for newspaper carriers by one year, until Jan. 1, 2022, passed both houses on Sunday and Monday.