I am Yvonne Stolworthy. I recently retired from my full-time nursing job and am embarking on a new adventure. In planning my retirement activities, I had decided that freelance writing would be one of my new roles. But on January 1, 2020, a new law was enacted in California called AB5, or Assembly Bill 5. This bill was intended to address the “gig economy” and protect workers who were misclassified as independent contractors (IC) when they should have been classified as employees and afforded all the benefits and protections that employees enjoy. Uber and Lyft were the intended targets of this bill, but it has become more widespread. The accompanying penalties written into the bill would be borne by the companies who continued to deny workers a minimum wage and other benefits to which employees are entitled.
Certain groups had obtained exemptions from the impact of this bill. Some of those who are exempt are dentists, lawyers, physicians, etc. Unfortunately, nurses, professional case managers or independent patient advocates are not mentioned. Truck drivers were initially not exempt but were granted a temporary exemption. The concern here is that if their exemption is eventually denied, they will owe penalties back to January 1, 2020.
The unintended consequences of this bill are affecting many freelance workers. Two large groups that have been impacted are freelance writers and musicians. The impact on freelance writers has decimated businesses and slashed incomes. The bill restricts freelance writers to no more than 35 submissions annually per media outlet. Media outlets responded by denying new work to freelance writers who live in California. Many California freelance writers had their contracts cancelled. Online writing job sites closed the accounts of Californian writers. The media outlets did not want to run the risk of having a 36th submission from a freelance writer from California. The penalties would be drastic and retroactive.
Musicians are suffering a similar impact. Many festivals and restaurants who hire musicians for infrequent events do not want the financial burden of employees who are needed only once in a while. Community events often run on a limited budget and do not have the resources for these additional costs.
Older workers often face age discrimination and would not be selected as employees in favor of a younger candidate in the traditional workplace. But as freelance workers, they can put their decades of experience to work. Other gig workers are living with disabilities that prevent them from being able to meet the expectations of an employee or even travel to the workplace. Some are caring for others with disabilities and are unable to attend the workplace and meet the expectations of an employee. Many single parents who are unable to afford childcare are freelance workers. The vast majority of freelance workers have no desire to be employees.
New Jersey and New York are considering similar laws. The federal government is now looking at similar legislation. A new house and senate bill called the PRO Act was recently introduced. The PRO Act is designed to strengthen workers’ rights to become members of a union. PRO stands for Protected Right to Organize. If this passes into law, it will overturn many state “right to work” laws.
I am aware of several Facebook groups dedicated to amending AB5 to remove the restrictions applied to freelance writers. There are other FB groups dedicated to the upheaval these laws are causing for many freelance workers. These bills are impacting large swaths of people who prefer to make their own schedules and work from home. Many companies who have eliminated their independent contract workers in favor of employees have put people out of work due to the increased costs associated with having employees.
Quite likely, the attempt to collect more taxes from employers is going to backfire as those who have lost their businesses and income are going to be paying less in taxes. The state of California might end up collecting less in taxes once the impact of the implementation of AB5 is realized.
Writers and musicians are not the only groups of freelance workers to be significantly impacted by this law. Translators, sign language interpreters, court reporters — the list goes on.
Could professional case managers who work as independent contractors be impacted by this law? Can independent patient advocates be impacted by this law? Maybe yes, maybe no. Only time will tell.
Moving to independent practice is a goal of many healthcare professionals as they move forward in their careers and into retirement. If you are looking at a career move that would make you an independent contractor, take the time to learn about this bill. Is your state looking to implement such a law? Being alert, aware and informed are keys to identifying issues that can disrupt your life before they become law.
The links below provide information regarding the law and the people who are struggling because of it.
Understanding Employee vs. Contractor Designation: https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation
California Lawmaker wants Labor Law for Freelancers Changed: https://OLIVIERLEMOAL/SHUTTERSTOCK.COM-the-businessjournal.com/california-lawmaker-wants-labor-law-for-freelancers-changed/?utm_source=Daily+Update&utm_campaign=9e96e872f4-EMAIL_CAMPAIGN_2020_02_07_09_28&utm_medium=email&utm_term=0_fb834d017b-9e96e872f4-79034833&mc_cid=9e96e872f4&mc_eid=fdafb09e31
Federal PRO Act: https://fightforfreelancers.com/federal-pro-act
How AB5 impacts the neighbors: https://m.dailykos.com/stories/2020/1/29/1914395/-Welcome-to-Ms-Kavin-s-Neighborhood-Today-s-Lesson-The-ABCs
LA Times Independent Contractor Law: https://www.latimes.com/california/story/2019-09-18/gavin-newsom-signs-ab5-employees0independent-contractors-california
Editor’s Note: Many bills become law with little attention. Unfortunately, most people do not have time to pay attention to what their state and federal lawmakers are doing until a bill impacts them. Once a bill is signed into law, it is hard to get it reversed, so staying alert and being involved in public policy is important. This article describes how an assembly bill from California is impacting one nurse who was looking for ways to finance her recent retirement by using her skills and expertise as a freelance healthcare writer.