How California’s Gig Economy Law Could Reshape Your Freelancer Pool
While intended to target services such as Uber and Lyft, the added restrictions of California Assembly Bill 5 could create challenges for associations that rely on freelance help.
If you rely on freelancers who are based in California—or if your organization is based in the state—you could run into some headaches in the coming months.
In recent days, the ramifications of Assembly Bill 5, a controversial law passed in the state earlier this year that takes effect on January 1, have led to a backlash specifically among professional writers and photographers. Journalists have raised concerns about a portion of the law that limits freelancers to 35 “submissions” per year for each “putative employer.”
After that, the employer would need to hire the worker on a part-time or even full-time basis, something many freelancers don’t actually want, as their independence often allows them to make more money than if they were directly connected with a company, while retaining ownership of their work.
The result is that freelancers who might have done far more than three dozen works in a entire year for a single client—whether in the form of content marketing, magazine articles, or other editorial projects—suddenly find themselves severely limited in the amount of work they can do for that client. Many also noted that under typical circumstances, they might hit the 35-article limit within a single month—forcing changes to their freelance approach in favor of longer pieces or more clients.
Already, the effects are being felt in the editorial space, where some media outlets have specifically excluded California-based freelancers from working with them, according to a recent Hollywood Reporter story.
The article sparked a major debate on social media over the weekend, including public criticism of state Assemblywoman Lorena Gonzalez (D-San Diego), who wrote the bill and admitted the number was decided through less-than-scientific means.
“Was it a little arbitrary? Yeah. Writing bills with numbers like that are a little bit arbitrary,” she told the magazine.
While Gonzalez defended the limits set in the law and cited concerns about media outlets that would misclassify writers, she faced criticism.
Overall, the reaction to the law in both the media and freelance fields has been negative, even as some see a reason for it. Speaking to Vox, Freelancers Union Executive Director Caitlin Pearce said her organization supports added protections to some degree, but noted that many of its members prefer the flexibility that freelance work offers.
“It’s a complicated problem,” Pearce explained. “Misclassification is certainly a big issue and there’s a group of workers that would be better protected as employees, and we don’t want to get in the way of that. I do think stronger exemptions for some industries is a good thing.”
The Vox article noted, however, that some sort of limitation was needed because of the state Supreme Court ruling that inspired the legislation, Dynamex Operations West v. Superior Court.
That ruling essentially created the so-called “ABC test” to determine whether a worker is an employee or independent contractor under California law. To hire an independent contractor, businesses must prove that the worker is free from the company’s control, is doing work that isn’t central to the company’s business, and has an independent business in that industry. If they don’t meet all three of those conditions, then they have to be classified as employees.
AB5 was meant to codify the Dynamex ruling into law, while also creating exemptions for some professions, such as hair stylists, real estate agents, and freelance journalists, to mitigate impact and disruption.
“So AB 5 is an imperfect solution, but it’s something,” argued writer Alexia Fernández Campbell. “More importantly, it outlaws the common practice of hiring freelancers to work regular shifts like an employee would but without giving them basic benefits or labor protections.”
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