Episode 1: Clean Up on Aisle AB5!
I started Labor Pains in 2014, and produced about three dozen episodes. But I got busy, as one does, and put it on hiatus. But a funny thing happened last year. A new law called AB5. If you’re in California, you may have heard of it. It reclassifies all freelancers, independent contractors, and “gig workers” in scare quotes and mandates that they be employees, whether they like it or not. Whether the companies paying them want that or not. It was sold to the public, at least the people paying attention, as a Gig Worker bill, aimed at helping “exploited” Uber and Lyft drivers.
But this law that took effect January 1st catches everyone in the net. Except for those occupations with exemptions. Architects. Podiatrists. CPAs. Lawyers – they can all have as many clients as they want. Independent journalists like me can submit 35 articles – or radio news stories – it isn’t clear – to one publication per calendar year before we have to be made employees. Why 35? Nobody knows. AB5’s author, Democratic assemblywoman Lorena Gonzalez-Fletcher, from San Diego, has said the number 35 is arbitrary. You’ll be hearing more about her on this show.
I’ve spoken with industry experts, employment lawyers, and labor leaders who say this law, even if the intentions were good, is a holy mess. AB5 is at once too broad and too restrictive, taking a legislative chainsaw to the real problem of worker misclassification when only a scalpel was needed.
That was back in November. Now the fallout is happening, and it’s ugly.
On Labor Pains, I’m going into more depth. AB5 is based on a California Supreme Court decision, called Dynamex, handed down in 2018 that says everyone is presumed to be an employee unless they meet three criteria. It’s called the ABC test. These workers – ahem, professionals – must prove that they: a., are free from the company’s control, b., perform tasks outside the company’s main business, and c., operate a truly independent business.
The B test is very hard to get around for many of us. And the business-to-business exemption is not the get-out-of-AB5-free card it was advertised as, according to the California EDD, the enforcement body that will be fining companies starting… yesterday. What’s a fearful employer to do?
The author of AB5 says it codifies the Dynamex decision. I’ve even repeated this, when I reported on it. Except it isn’t true. Dynamex was about wage orders, occupations where the law says you must pay a minimum amount per hour. AB5 is for everyone.
The confusion over this bill is creating havoc in California. What we’re seeing is many hiring companies, looking at this law, and the possibility of a penalty of $25 grand for misclassifying a worker… are saying, let’s not use anyone in California if we can avoid it.
I have to push back on some of the rhetoric by the bill’s authors, who say their law protects exploited gig workers who really want a REAL job, with benefits: About 30 percent of Americans are freelancers, mostly by choice. This is a huge social experiment. And it’s already killing the careers of professionals in more than 100 industries. You’ll be hearing from some of them in upcoming episodes.
There are some bills right now in Sacremento to both fix AB5 and repeal it. The repeal bill won’t go anywhere because it’s sponsored by a republican. There’s a “clean up” bill in Sacramento, sponsored by AB5’s author, Lorena Gonzalez fletcher herself, but in her own words it’s just CLARIFYING what’s in the law.
Gonzalez Fletcher has been, let’s say, less than truthful about the law, and less than gracious at times to people who have lost their livelihoods because of it. In this January interview with KUSI TV in San Diego – quite the train wreck, she becomes quite defensive. As much as I hate to link to an article in a far-right website, this take on her interview is pretty accurate and well written. And this interview, also on KUSI, with former California gubernatorial candidate – Republican, he lost – John Cox, is pretty spot on about what’s at stake with AB5 and the state economy.
Funny thing about this law. It really is making strange bedfellows, as politics sometimes does.
I’m not the only journalist to report on the inconsistencies (I’m being generous here) in AB5 and the harmful fallout. Traditional (union!) publications like the Orange County Register, and the New York Times say, correctly, that the law will upend contractors’ careers. Forbes says the law will hurt women. The Hollywood Reporter says it will devastate writers, directors and all below-the-line talent in film and TV.
Oh, and here’s the kicker. Language from AB5 has worked its way into a new bill in the US House or Representatives, and is being introduced soon. HR2474 or the PRO ACT. The AB5 mess is metastasizing.
Episode 1 is an interview with Shaun Spaulding with New Media Rights in San Diego. He helps me make sense of AB5, and even suggests how it could be amended. And he explains how unions might be the intended beneficiaries of the law.
Labor Pains Podcast is about more than this law. I will be interviewing regular folk doing demanding, degrading, and dirty jobs, as well as academics, trend setters, and industry experts. But AB5 is the most important labor story of the year, so expect to be hearing a lot about it.
Tips? Ideas? Write me at Laborpainspodcast AT g-mail
Episode two: “Clean Up On Aisle AB5 part two – Truckin'”
Ab5 has been getting a lot of pushback from professionals who say the law is killing their businesses. And there are lawsuits. The first big legal challenge was late last year, when the California Trucking Association filed a federal lawsuit to block it from applying to truck drivers.
On New Years Eve a judge issued a temporary restraining order against the entirety of AB5 – for trucking. In January, a judge enjoined the state from enforcing the ABC test on motor carriers in CA. A more narrow ruling.
So for truckers, enforcement of AB5 is on hold. For now. But the trucking industry is diverse. A large part of trucking is in construction – and that is NOT impacted by the latest ruling. So AB5 is still in effect for them. it’s complicated. That’s why I’m here.
To figure out what’s going on in trucking, I talked with Joe Rajkovacz, the director of governmental affairs and communications for the Western States Trucking Association, and with Debbie Ferrari, who goes by TruckerGal on Twitter. She’s been advocating for indepement owner operators for some time now.
Rajkovacz represents truckers who want to remain independent owner-operators. And he shared his own experience about why many want to stay independent. Ferrari points out that the original decision to reverse the Dynamex drivers was correct, but Dynamex, and now AB5 with its ABC test, is too broad for her industry. She told me many owner operators want to stay independent, but they won’t be able to meet the B part of the ABC test in AB5. That means you can’t work as a contractor for a company in the same line of business. But if a trucker can’t do that, they won’t get any work at all.
Here’s one more complication. I’ve talked to a lot of people who’ve heard about AB5, and what they think they know is – it’s about Uber and Lyft. That’s how was sold to the public and to legislators. As protection against so-called exploited gig workers in ride sharing. Joe Rakovitz tells me that, ironically, due to a legal loophole Uber and Lyft and door dash, could win a legal fight against AB5.