On January 1, 2020, a piece of freelance legislation known as AB 5 went into effect in California. Not only does it make freelancing in California more complicated, but it also makes California freelancers less attractive to long-term clients.
The new freelance laws are a major game-changer for a wide range of freelancers, including writers, editors and photographers who can now only make 35 submissions to a client per year.
That means if a California-based freelance writer had a weekly column, the publication will either need to hire her as an employee or she will need to establish a business entity as defined under local and state laws.
For a role to be considered a freelance or independent contracting position, it needs to meet a three-prong test, and the elements are:
*The person is free from the control and direction of the hiring entity in connection with the performance of the work.
*The person performs work that is outside the usual course of the hiring entity’s business.
*The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
There are some exceptions, which appear just as arbitrary as the law.
For example, the restrictions outlined in this freelance legislation apply to still photographers, such as photojournalists, but not to those who produce motion pictures, including news broadcasts.
Reasoning for California’s Freelance Laws
According to section one of AB 5, “the misclassification of workers as independent contractors has been a significant factor in the erosion of the middle class and the rise in income inequality.”
This horrendous collection of ill-thought-out regulations allegedly aims to give “potentially several million people who have been misclassified basic rights and protections they deserve under the law, including a minimum wage.”
AB 5 is also designed to level the playing field between businesses that properly classify and misclassify workers, and to capture the “needed revenue” for the state that’s currently being lost by those who avoid paying payroll taxes, premiums for workers’ compensation, Social Security, unemployment and disability insurance.
The Real Effects of California’s AB 5
In actuality, what AB 5 did was take the “happy” out of new year for a lot of people.
Lawmakers seem to believe that AB 5 is going to drive more companies to hire freelancers as employees. But in reality, freelancers have lost jobs and are many are left worried that their livelihood is in danger—with good reason.
In December, before the legislation even took effect, Vox Media fired 200 freelancers that worked for SB Nation.
The hundreds of contractors this law impacts were given three choices: apply for a small number of full-time positions, write for free, or quit writing for SB Nation altogether, LockoutLanding said.
SB Nation has agreed not to revoke access to Vox’s publishing platform, creating instead the new role of “Community Insider,” an unpaid, volunteer position, LockoutLanding added.
That’s right. It appears that this legislation did freelancers the favor of limiting paid opportunities while opening the door for them to work for free.
Writer John Ziegler published a piece titled Thanks to California’s Insane New AB5 Law You Will Be Reading Me a Lot Less on Mediate in 2020.
In the article, he explained that after four years working with the site, his agreement which had been for 120 columns per year is now illegal thanks to “draconian restrictions” like the 35-column limit that the bill’s author, Assemblywoman Lorena Gonzalez, admitted has no logic.
And the executive director of the California News Publishers Association expects thousands of freelance jobs in the state to be negatively affected by the law, according to New York Post.
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The American Society of Journalists and Authors and the National Press Photographers Association have filed lawsuits and are being represented pro bono by the libertarian Pacific Legal Foundation.
These organizations argue that the law unfairly targets certain professions. Putting a cap on the number of stories a journalist can write for a single publication is unfair since similar restrictions aren’t placed on other industries, such as graphic design, the Pacific Legal Foundation argues.
“The government cannot single out journalists,” Jim Manley, an attorney for the foundation, said in a statement to the Los Angeles Times.
Many California freelancers are hoping that the court will be able to intervene and do something to change the tide.
Gonzalez has said she’s willing to revisit the terms of AB 5 but it’s here to stay.
“Advocate for ongoing work. But stop saying this is a bad bill. It’s not. It’s a great structural reform we’ve needed since the 1940s. I’m not going to repeal it. We will continue to refine it. But educate yourself 2,” she tweeted.
Steven Smith, a spokesperson for the California Labor Federation, which sponsored AB5, said he hopes efforts to tweak the law will result in industry-specific fixes over the next year, reported Los Angeles Times.