#37: California’s Harmful New Freelancer Law, with Randy Dotinga

Today’s episode is a little different. I have invited a guest on to explain a dangerous new law in California called AB5 that all freelancers need to know about. It threatens the very existence of freelancing. Even if you don’t live in California, you need to know about this law because other states are following suit. In fact, after I recorded this episode, I learned that New Jersey Democrats are enthusiastically supporting a bill based on California’s bill. New York state is also working on a similar law, and every Democratic presidential candidate is said to support this type of law because they see it as pro labor.

So what is this and why should we worry? Assembly Bill 5—or AB5—takes effect in California on January 1. My guest in this episode, Randy Dotinga, a fellow freelance writer, explains the law and its ramifications to us. Randy is the former president of the American Society of Journalists and Authors (ASJA) and has been a full-time freelance writer for 20 years. He lives in California and continues to advocate against this law to state lawmakers.

AB5 includes a three-pronged test that says California residents who are paid for their labor or services should be employees unless the companies paying them prove individuals meet the following three things:

1. They must be free from the company’s control
2. They must perform tasks outside the company’s main business
3. They must operate a truly independent business

It’s that second prong that will be particularly harmful to freelancers. As a writer working for a news site, newspaper or magazine, I am NOT performing tasks outside their main business. Therefore, I don’t meet that criteria and might have to be hired as an employee.

One good note for freelance writers and photographers is that they were able to get included in the law a cap, which states that freelance writers and photographers can work as a freelancer for one company for up to 35 submissions of content per year. But after 35 submissions, they should be employees. As Randy says: “It’s like [the AB5 bill author] saved our lives, but it’s like she made us cut off a limb. I don’t know how grateful we should be about that.”

And the law is not that simple. In fact, there are a lot of exemptions for certain industries. For some reason, grant writers, marketing professionals and graphic designers were awarded exemptions. Those freelancers who weren’t so lucky and were not exempt include writers, photographers, editors, audio editors, videographers, transcriptionists, translators, court reporters, truck drivers and on and on.

 

What you’ll hear in this episode from Randy:

Companies outside California have already stopped hiring California freelancers. It’s the company’s responsibility to make sure freelancers meet the criteria to NOT be considered employees. It’s complicated and cumbersome, so companies are just looking elsewhere—they can easily hire freelancers in other states that don’t potentially jeopardize their company.

Alternative newspapers and websites run by underrepresented communities rely on freelancers and cannot afford to hire writers as employees. In one example, a taxi driver who writes a weekly column about driving a cab for the local alternative newspaper will no longer be able to write that column.

Randy says they’ve heard from people with disabilities who say freelancing allows them to have a flexible schedule, something being an employee doesn’t often provide.

The law does have a business-to-business exemption. But there is a long list of criteria an individual has to meet to be considered a small business.

Creating an LLC doesn’t seem to protect people because the law covers any independent contractor. However, creating an LLC may help convince your clients that you are a small business and make them feel more comfortable about hiring you.

New York and other states—particularly Democrat-run states—support this type of law. Just this week, New Jersey announced a bill similar to California’s.

Randy is working with ASJA and other groups to try to get the law changed. But they’re up against strong unions and other pro-labor groups.

There’s a private Facebook group of mostly California writers organizing against this law. Search for Randy on Facebook and ask him for an invite. There are about 700 members now.

 

Resources:

The full text of AB5

 

Friend Randy on Facebook and ask to be invited to the Facebook group of California freelancers organizing against this law. Even if you’re not in California, the group can help you get educated on this issue and how to fight it.

Randy Dotinga on Twitter

American Society of Journalists and Authors

American Society of Journalists and Authors on Twitter

Associated Press: “Truckers File 1st Lawsuit Against California Gig Economy Law”

Washington Examiner: “Proposed New Jersey Legislation Threatens Independent Contractors”

New York Law Journal: “Generation Gig: Can New York State Learn From California’s Legislation?”

Dame magazine: “Will This California Law End Freelance Work?”

The Hollywood Reporter: “‘Everybody Is Freaking Out’: Freelance Writers Scramble to Make Sense of New California Law”

Los Angeles Times column: “Freelancers Fear California’s New Gig Worker Law Will Wipe Them Out”