By Julie BUTCHER

“The system is rigged against the working poor and middle-class workers. That’s the truth. I’m so tired of corporate America. I’m tired of billionaires. I’m tired of income inequality. We are going to have to fight like hell coming out of this to change things. We have no choice,” San Diego Assemblymember Lorena Gonzalez (D-San Diego) who introduced AB 5 in 2019 to help California workers, fashioning the legislation alongside representatives of organized labor to curtail abuses perceived to be caused by the “gig economy.”

Signed into law in September 2019 by California Governor Gavin Newsom, effective Jan. 1, 2020, the legislation limits the ability of corporate employers to treat workers as “independent contractors,” which curtails benefits that are otherwise offered to company employees.

The new law “will help reduce worker misclassification – workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits,” Newsom wrote in his signing message.

Under AB 5, Californians are considered employees of a business unless an employer can show the work they perform meets a detailed set of criteria established by a California Supreme Court ruling last year in a case known as “Dynamex.” Under those criteria, a worker is defined as an employee if his or her job forms part of a company’s core business, if the bosses direct the way the work is done or if the worker has not established an independent trade or business.

According to its proponents, California’s bill is arguably the strongest of its kind in the nation, giving the state and cities the right to sue companies over misclassification and overriding the arbitration agreements that many businesses use to shield themselves from worker complaints. The new law’s supporters point to audits conducted by state employment officials that found almost 500,000 workers were wrongly treated as independent contractors. Much of the early legislative debate on the bill centered on low-wage sectors of the California economy.

“As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow,” Assemblywoman Lorena Gonzalez wrote, following the bill’s passage.

In February, the city of San Diego obtained a preliminary injunction against grocery delivery company Instacart in the wake of a judge’s ruling that the company misclassified its employees as independent contractors. San Diego County Superior Court Judge Timothy Taylor’s ruling stems from a lawsuit brought by City Attorney Mara Elliott, who alleged Instacart was evading providing its “shoppers” with worker protections like minimum wage and overtime pay by classifying them as independent contractors rather than employees.

Ride-share companies such as Uber and Lyft, along with other “app-based” employers, responded to the passage of AB 5 immediately, refusing to change their relationship with their workers and initiating lawsuits to block implementation. Joining with food delivery service Postmates, spending on Prop 22, a statewide initiative to exempt themselves from the law, is expected to top $90 million before the Nov. 3 election.

Gonzalez has been relentless in defending the intent of the legislation.

“This is an effort to right a ship that’s gone wrong. And I believe so fully in it that I’m willing to continue to take on what is a lot of piling on. You’ve got to get it right.

“Come and get me, tech bros. I’m here every single day to take on the plight of workers against big tech,” she tweeted on Dec. 30, 2019.

Pro-business state senator Jeff Stone (R-La Quinta) spoke against the measure. Rebuking pro-labor lawmakers, he referred mockingly to the “union caucus” he thought was backing the bill and said that those who achieved exemptions “didn’t get caught in the labor union spider web spun by the black widow of public policy.”

The bill caused immediate problems for the large freelance and independent contractor community in California as it featured clauses that restrict freelance writers from accepting more than 35 assignments from a single outlet and stopped musicians from working regular gigs at the same venues. It also affected a host of businesses that reportedly stopped using California-based freelancers for concern they would be liable for retroactive fees and fines.

AB 5 also drew criticism from translators, independent musicians, truck drivers, franchise operators and other occupations in addition to journalists, all of whom feared the loss of their livelihoods. Republican legislators have introduced a variety of bills to change or overturn the law in addition to commitments to support the ballot measure.

The law is still being challenged in court by gig economy giants like Uber and Postmates that are backing Prop 22, which would exempt app-based drivers from the law.

Former speaker and San Francisco mayor Willie Brown weighed in as well, fighting to continue to write more than 35 columns a year for the San Francisco Chronicle.

“Lyft has never obeyed AB 5 … I don’t know anybody [who] has except the Chronicle,” Brown fumed of the move by Hearst Newspapers’ flagship publication. “For 12-plus years, every Sunday, I’ve written that column in the paper and never taken a vacation. And this is the most important year. This is a campaign year, when there’s really a contest,” Brown told Politico in early September.

On Sept. 4, Newsom signed AB 2257 to address this facet of AB 5.

“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,” Gonzalez said.

Changes include removing the 35-item cap on the number of submissions that a writer, photographer or editor can provide a single contracting entity before they must become an employee. Another change specifies that a contractor cannot replace an employee.

“Workers shouldn’t be tied up in litigation for years on end before they can access their basic labor rights. AB 2257 strikes a balance and continues to provide protections for workers against misclassification that had previously gone unchecked for decades under the old rules,” Gonzalez explained on social media on Sept. 4.

The new, modified version of the law takes effect immediately and provides the flexibility to such diverse employment fields as freelance writers, musicians, film support crews and visual artists, who now can continue working as independent contractors.

• It eliminates the 35-submission cap for freelance writers and photographers. Current rules dictated that California-based freelancers who contribute more than 35 submissions to an outlet per year must be reclassified as an employee.

• Translators, appraisers and registered foresters are added to the “professional services” exemption. The exemption currently covers graphic designers, travel agents and marketers, among others.

• The law allows music industry workers to continue working as freelancers. The list of exemptions includes recording artists, songwriters, producers, promoters, and many others.

“AB 2257 represents a comprehensive framework for employment law that makes a clear distinction between employer-employee relationships and professionals that run their own independent businesses,” Gonzalez said on the Friday before Labor Day. “This legislation was a product of robust dialogue over the last year with workers and businesses from every part of the state.”

Gonzalez’s office has produced a detailed summary of the new legislation and its impact found at https://tinyurl.com/y2cvbzcq.

  Julie BUTCHER