by Tyler Durden
Mon, 09/07/2020 - 19:10 Authored by Matthew Vadum via The Epoch Times,
California Gov. Gavin Newsom quietly
signed a law on Sept. 4 repealing parts of an unpopular law that put
independent contractors in the state out of work and limited the earnings of
freelancers, including visual artists, musicians, writers, translators, and
film support crews by classifying them as employees.
The enactment of the new measure, which came after months of
political and legal pressure from the trucking industry, companies such as Uber
and Postmates, and groups such as the American Society of Journalists and
Authors Inc. and the National Press Photographers Association, is a rare defeat for the labor movement in
solidly progressive California.
The new law, known as AB 2257, passed both chambers of the state
legislature unanimously on Aug. 31.
The
Democratic governor announced on
his website Sept. 4 that he had signed the measure but offered no explanation
for why he had done so. The governor’s office could
not immediately be reached for comment.
The new law took effect immediately upon signing.
AB 2257 amended AB 5, which attempted to determine who is a
contractor and who is an employee and forced companies to reclassify their
freelancers as employees. The new law provides greater flexibility to
freelancers.
When AB 5 took effect Jan. 1, that law made it hard for
so-called gig-economy companies to classify people who work for them as
independent contractors instead of employees. The idea being the measure was
to prevent freelancers from being unfairly exploited by employers.
Assemblywoman Lorena Gonzalez, a San Diego Democrat, wrote AB5 to implement a 2018 California Supreme Court
decision known as Dynamex Operations West Inc. v. Superior Court, that deemed
many freelancers to be employees, a status that entitled them to the minimum
wage, overtime pay, unemployment insurance, and health benefits.
Employees in California are entitled to benefits not available
to contractors, such as the minimum wage, health insurance, and paid time off. AB
5 was strongly backed by labor organizations critical of hard-to-unionize
freelance jobs. Unions hoped the law would give them an edge in recruiting new
members.
AB 5 was enacted ostensibly to help workers by preventing their
“misclassification” as non-employees.
It adopted the so-called “ABC” test to determine employee
status, according to the Economic Policy Institute (EPI). The test stipulates
that workers may only be considered independent contractors when a business
proves the workers:
“a. Are free from control and direction by the hiring company;
b. Perform work outside the usual course of business of the
hiring entity;
and c. Are independently established in that trade, occupation,
or business.”
But mere weeks after the enactment of AB 5, which is still being
challenged in the courts, the law ran into headwinds as freelance workers and others in a state with
many independent contractors suddenly found themselves out of work or with
their ability to earn a living severely restricted.
It stopped freelance writers from accepting more than 35
assignments from a single publisher and hindered the ability of musicians to
accept regular paying gigs. Companies outside California stopped using
freelancers in the state as they feared financial penalties for violating the
law.
Gonzalez
admitted there were problems back in February.
Gonzalez wrote in a Feb. 6 tweet that she was willing to
consider easing the restriction affecting journalists. “Based on dozens of
meetings with freelance journalists & photographers, we have submitted
language to legislative counsel that … will cut out the 35 [articles]
submission cap & instead more clearly define freelancer journalism,” she
wrote.
Later in the month she reported progress on writing what turned
out to be AB 2257.
“Having heard additional feedback from a variety of freelance
writers, photographers and journalists, we are making changes to
Assembly Bill 5 that accommodate their needs and still
provide protections from misclassification,” she said February
27.
AB 2257 abolishes the 35 item submission limit for writers and
photographers contained in AB 5. It also exempts translators, appraisers, and
registered foresters from the restrictions.
Gig-economy
companies are supporting a state ballot initiative this Nov. 3, Proposition 22,
that would treat app-based drivers as independent contractors, not as
employees.
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