December 30, 2019
When the clock strikes midnight on January 1, 2020, California will enter a new decade and a new legislative era, when recently passed labor laws like Assembly Bill 5 (AB5) will regulate gig employment practices and ideally give workers, particularly freelancers, more power on the job.
Assemblywoman Lorena Gonzalez said the new bill requires companies to reclassify many contractors as employees in order to stop workers from falling into a permalance cycle, where they are working regularly but do not have access to benefits and protections employees enjoy.
She introduced the measure to limit the use of 'contractors' by companies in California. A state senate committee approved the measure in July, and Governor Gavin Newsom signed the bill in early September.
Under AB5, companies will have the option of taking on regular freelancers as employees in varying capacities or "they can simply say 'we have a business-to-business relationship' and, if these freelancers are truly small businesses, they can continue to work," according to Gonzalez.
The law, which codified and expanded on an April 2018 California Supreme Court decision, raises questions about what exactly defines a contractor in varying industries, from the creative, like musicians and journalists, to the labor-intensive, like port truckers, who serve the two largest ports in the U.S.: Los Angeles and Long Beach.
Since the bill passed in September, some companies have been struggling to figure out how to comply. Ridesharing giants Uber and Lyft and food delivery service DoorDash, all of which claim their many drivers are contractors, are pushing a ballot initiative that could win them a permanent exemption.
The bill has also had an impact on other industries, such as journalism, where many employees freelance. It garnered some unfavorable attention after Vox Media announced it will end contracts with 200 freelancers in favor of 20 full-time or part-time employees, although Gonzalez told Cheddar the contention that AB5 caused the employment changes is misleading.
"What Vox News said is they've been contemplating this for two years," said Gonzalez, who noted that Vox was previously sued for misusing and underpaying freelance workers..
"We're not going to stop taking on the gig economy," the assemblywoman said, stating that companies like Uber and Lyft do not take responsibility for the actions or well-being of workers. "That's fundamentally unfair to the workers, to the taxpayers, and to California as a whole."