California’s Assembly Bill 5 came for me today

https://www.mavsmoneyball.com/2019/12/16/21024414/california-terrible-ab5-came-for-me-today-and-im-devastated

by pgrote • 7 years ago

83 138 7 years ago

mavsmoneyball.com

somebodythere• 7 years ago

Does AB5 apply to independent contractors living in California or businesses based out of California (or both)?

tick_tock_tick2• 7 years ago

Both

stevespang• 7 years ago

"California’s legislature recently passed a law, Assembly Bill 5, codifying a California Supreme Court decision that classifies many independent contractors as full-time employees" . . .

is that a giant sucking sound I hear as scores of independent businesses are forced to leave California because they can no longer endure the punishment of California government forcing more taxes and regulations on them ?

In effect, classifying more and more independent contractors as employees as just a "backdoor parlor trick" for government to collect more employment taxes . . .

pimlottc• 7 years ago

In effect, classifying more and more independent contractors as employees as just a "backdoor parlor trick" for government to collect more employment taxes . . .

I'm not sure that matters, contractors still have to pay self-employment taxes.

thrower1232• 7 years ago

At some point, the poor camel's back is going to give out and one of these thousand cuts is going to kill the golden goose. This is probably not the one, but piling up misguided policies decade after decade is destroying a state that should be a utopia.

bsder2• 7 years ago

And yet California is the 6th largest economy of the world and growing.

And after purging most of the Republicans from the Assembly somehow hasn't had any budget issues. Imagine that.

So, I'm still waiting for that inevitable exodus of Republicans from California so my housing costs will come down. I hear tell that Texas is your utopia. Could y'all hurry up and leave already?

freeopinion2• 7 years ago

I don't know California employment law and I don't know the specifics of AB5, but I have some experience with "backdoor parlor tricks." They are most often used by corporations looking to dodge various obligations. I have seen big tech companies outsource entire departments of their operation in a way that some schmo shows up to the same company every day and gets their marching orders from an employee of that company. They do this for years. But they are not employees, or temps. They work for some "contractor" whose only contract is with the company in question.

Why doesn't SB Nation want to treat these "contractors" like employees? I don't care at all for California, but I have a hard time seeing them as the bad guy here. This editor claims many people do so much work for SB Nation that they can't fit into the small box carved out by AB5. Before I get too worked up, I'd ask for a definition of "small box." If you're putting in 30 hours a week for SB Nation, and they are your only contract, it's pretty clear that you are an employee and any other arrangement is a dodge.

foogazi2• 7 years ago

If you're putting in 30 hours a week for SB Nation, and they are your only contract, it's pretty clear that you are an employee and any other arrangement is a dodge.

Why does it matter? Why can’t citizens freely arrange their own working conditions?

Why can’t the editor decide to work for who she wants?

Because she lives in California

mdorazio• 7 years ago

People have been saying some version of this about California economic policies for as long as I can remember, but the state somehow manages to keep attracting business and residents. First it was high taxes, then it was effectively banning non-competes, then it was raising minimum wages in major cities, now it's redefining contractor classification.

I have to say that personally I don't see this going any differently than the previous times - businesses will continue to do just fine, some workers will get forced out of the state, others will take their places, and the net result will be a continuation of rising inequality [1], but not much else.

[1] https://calmatters.org/california-divide/2019/10/income-ineq...

s17n5• 7 years ago

I guess I'm a bit behind the conversation here but what exactly are the obligations the reclassifying contractors as employees would place on employers that are apparently impossible for SB Nation to fulfill?

microcolonel• 7 years ago

Well, first of all they'd have some obligation to ascertain that, and that alone won't come cheap. Effectively, Rebecca was likely more productive than the law allows, so they would need to provide her with ridiculously outsized benefits even though she is clearly a genuine independent contractor, and it's likely that other contributors were also too productive for the law. Though, and this bears repeating, even figuring that out is going to be very expensive.

StanislavPetrov• 7 years ago

Paying for health insurance, unemployment insurance and a host of other fees required of businesses for employees that aren't required for contractors.

tantalor4• 7 years ago

I think those only kick in if the number of employees is large enough.

The article doesn't mention that detail so you may be right.

ars7• 7 years ago

Exactly. But you don't list the actual problem:

Those benefits are based on working certain number of hours (because the benefits are fixed, they can not adjust them up and down based on hours worked).

So basically what this law does is prevent people or employers from having flexibility in hours.

s17n5• 7 years ago

Pretty sure those requirements only apply to full time employees.

gregd15• 7 years ago

It removes a mechanism that allows companies to exploit workers by treating them like employees, but considering them legally as ICs (no Workman's Comp, at-will, etc.) and giving them a 1099 form at the end of the year.

watwatinthewat3• 7 years ago

But this person is losing her "passion project", so it must not be worth the intended consequences. (/s)

jcims3• 7 years ago

Ultimately we're forcing a bunch of societal burden onto employers. So you end up with a bunch of admin overhead at the employer to manage all of these additional requirements and maintain all of the admin burden at the regulators to ensure that they are doing their job.

Wouldn't it be better to just tax companies for 1099 like you do unemployment tax and pivot that over to a state-managed healthcare and retirement benefit that 1099's could opt in to for some reasonably low cost?

ars7• 7 years ago

Please explain how they are being exploited? What exactly do they lose?

And in your reply don't forget that if they converted to employees their base salary would be lower.

s17n5• 7 years ago

In California at least, pretty much all employees are at-will. Workman's comp I guess is a thing though - is it really that expensive?

bsder2• 7 years ago

Even if you fall afoul of the AB5, all this does is move the burden of proof to the employing company that the people employed are independent contractors. If your people are all happy being independent contractors, you're probably going to be okay.

The fact that SB Nation would rather fire all these people rather than even attempt to comply simply tells me how much value SB Nation places on them.

jcims3• 7 years ago

What if you're just publishing a few articles a month?

SpicyLemonZest2• 7 years ago

No, it does more than simply move the burden of proof. Writing articles for a media site is always going to fail the ABC test; it's clearly "integral to the company’s business", no matter how strongly the writers look like independent contractors in other ways.

tick_tock_tick2• 7 years ago

And thus the unintended but extremely predictable side effects start.

tantalor4• 7 years ago

Some more discussion on alternatives they excluded would help. Like, what about part-time employment?

enjoyyourlife• 7 years ago

Why is the Editor-in-Chief being classified as an independent contractor?

kasey_junk7• 7 years ago

Probably because they do piece work on their own time with flexible hours and no set schedule?

heavyset_go• 7 years ago

Plenty of people who are employees have flexible hours and no set schedules.

tantalor4• 7 years ago

(deleted)

scarejunba3• 7 years ago

Because that's what he would prefer.

taurath5• 7 years ago

You can’t have employees in everything but name only. This this guy cheers on being a second class citizen in the labor world doesn’t help all the people with absolutely no job security, making worse pay and benefits for someone with connections to take 30-60% off the top of their work.

gregd15• 7 years ago

I totally get and understand being scared at losing part of one's income, especially in place like California, but I agree with you. This is a step in the right direction and removes the ability for companies to continue to exploit 1099s.

gregd15• 7 years ago

Being downvoted for having an opinion? Good god people.

susijdjdjxa4• 7 years ago

Those people also aren’t helped by having their employment taken away by this legislation.

I have a friend with health issues that mean that he’s only able to work some of the time, and can’t predict when. Gig economy jobs are the first time that he’s been able to earn any income beyond his disability check. I hope this bill that tries to enforce the “normal” full-time employment relationship doesn’t deprive him of that.

tantalor4• 7 years ago

This person already has a full time job.

taurath5• 7 years ago

I agree that people in that situation should be able to work some of the time. Just the same as teenagers, part time workers and legit "extra income" people. This is always the argument against, say, raising the minimum wage, or providing more workplace protections.

Its a lie - you can absolutely fix this situation. No law is gonna be perfect, but having a situation where the "main" job provides actual days off and health insurance is a good thing. If disability is the main job, and you get benefits through that, nothing should stop you from doing part time.

But, you shouldn't allow your friend who already gets a disability check to dictate that everyone being abused by a second class labor system shouldn't have rights too. I would RATHER your friend who is already taken care of lose their gig economy job if people who have to work 3 jobs instead only have to work 2. I'm sorry, thats better overall for society, to me. You can argue the tradeoffs, and maybe have people on disability be able to work 20 irregular hours without losing disability. But you're depriving people of time off to be sick, time to be with their families, and health insurance so your friend can get slightly more self-actualized while he's actively getting a check every month? I'm being somewhat trite here but, in my mind its not even a comparison.

neonate2• 7 years ago

"This guy" is not a guy.

newman8r• 7 years ago

Could these people just form an LLC to get around this? So you'd be acting as a business not an individual.

gregd15• 7 years ago

That's exactly what they have to do and some are. However, forming and running an LLC can have it's own headaches depending on the type of business you're running. In some industries, running as an LLC would cost you more than you'd make as an IC.

jcims3• 7 years ago

Seems that the option of running as an IC is going to disappear for many, no?

SkyPuncher3• 7 years ago

What industries does an LLC cost that much to run in?

I've had one for years, it costs less than $250 annual to actually maintain the LLC.

vanniv• 7 years ago

They could.

But for many things, it's just easier for everybody to just not deal with California.

jameslk4• 7 years ago

I'm guessing we'll see more stories like this as the compliance departments of companies realize their new found liabilities. Especially once the lawyers start pumping out ads. I'm wondering how freelance networks such as Upwork, Fiverr, Toptal, and YC's own Gigster are going to react.

drawkbox8• 7 years ago

Correct me if I am wrong but freelancing sites like Upwork, Fiverr, Toptal, and YC's own Gigster won't be affected. The sites only setup contractors with businesses on a project by project basis and meant to be temporary from the outset.

This is meant to target companies that provide the services directly, hire people to work non-stop for them and in the same field/line of work or industry as the business.

Also many freelancers already have LLCs or business so this is business level contracting corp to corp on these sites.

Places like Uber/Lyft might also be able to argue they are a matchup service between drivers and passengers/travelers but it will probably change some payment aspects.

Companies that provide food, cleaning, or services like janitorial and others that cheap out by making workers contractors are probably the biggest offenders of having people employed for years, providing that service, and cheaping out on contractor labor instead of employment.

There will probably be lots of loopholes found as well over time, primarily when becoming a business rather than an individual working for these types of businesses.

jameslk4• 7 years ago

Correct me if I am wrong but freelancing sites like Upwork, Fiverr, Toptal, and YC's own Gigster won't be affected. The sites only setup contractors with businesses on a project by project basis and meant to be temporary from the outset.

This is incorrect. These companies do not simply set up contracts between companies and walk away and they aren't necessarily project based (especially for Upwork and Toptal). Nor are the contracts necessarily short term (some go on for years). These companies collect payments on behalf of the freelancers that work underneath them and some take an undisclosed percentage or added cut on top. I'm a member of Upwork, Toptal and Gigster, so I'm basing this off my actual experience.

Reviewing AB5's ABC test, I see nothing that prevents these companies from failing at least one if not all the provisions (you need to be compliant in all 3):

1. the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact

2. the worker performs work that is outside the usual course of the hiring entity's business

3. the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity

Also many freelancers already have LLCs or business so this is business level contracting corp to corp on these sites.

This is not necessarily the case. I definitely didn't have an LLC when I started freelancing. It costs $800/year in California and doesn't offer much benefit to a freelancer.

Edit: It looks like in the case of Upwork, they're using the "professional services" exemption from AB5 and offering to W2 workers like a staffing agency:

And if you look at the text of the law there's various mentions about -- around professional services being excluded. So that's one component of it. The second component of it is the fact that we actually also are payrolling services. So we would -- we call it freelancing but some of the work in Upwork is under a 1099 some of the work on Upwork is done through a W-2. Through our product offering we have called Upwork Payroll.

https://www.fool.com/earnings/call-transcripts/2019/11/07/up...

unlinked_dll• 7 years ago

Barring the exemptions on certain industries/salary thresholds, I don't see how what these businesses do is fundamentally different than say, uber connecting you to a driver. They're distributed consultant firms, I could see an argument for Upwork et al needing to classify their freelancers as employees and cover benefits if they fit the criteria.

DoreenMichele3• 7 years ago

That new law makes it impossible for us to continue with our current California team site structure because it restricts contractors from producing more than 35 written content “submissions” per year.

(From a link found in her first paragraph: https://www.sbnation.com/2019/12/16/21024100/thank-you-calif...)

A lot of writers do it part-time, have other sources of income, have medical coverage and the like via other paths and do contract writing by choice because it makes sense for them.

This law seems to be throwing the baby out with the bath water.

/2 cents from someone who does writing as a 1099 worker. Thankfully, this doesn't impact me because I no longer live in California.

vector_spaces2• 7 years ago

The effects of this law are complicated -- I can't say that it's clearly a net boon or a net fail to me.

While I sincerely empathize with Lawson here, I can name off the top of my head a dozen restaurants, several grocery stores, and a handful of B2C startups in the Bay Area that have historically misclassifed most of their cooks, dishwashers, waiters, cashiers, stockers, warehouse, and shipping & receiving staff as independent contractors. Many of those misclassified employees would rather[0] be employees with basic protections such as overtime pay + some degree of protection in the event that they are injured while working.

At the same time, I know of some folks who are completely out of work as a result.

[0] I know because I asked some of them, and was one of them in a past life

NotSammyHagar2• 7 years ago

Every worker should have those basic protections. There are some people who are fortunate like this writer to have a real job and do not need their part-time gig. But there are way more people who could benefit from those protections.

I'm a software engineer so I'm already pretty fortunate. Should we change laws so that we somehow hire more engrs, maybe pay less employment taxes or some such thing? Probably not. And there are plenty of people even in software engineering who lose their jobs and can't find another one for whatever reason, they'd benefit from stronger workplace protections. Workplace protections are a good idea, just like higher minimum wages; it's because raising the minimum bar is better because it helps those at the bottom.

Even if a privileged person could take on a part-time passion project and now they can't.

vector_spaces2• 7 years ago

I hear what you're saying, particularly about the author and her passion project. But there are some folks who aren't privileged by any stretch of the imagination who are probably going to experience some income loss or instability as legislation like this become more common. See [1] for an example, and also consider the situation for undocumented workers.

So it's complicated! This will probably be a good thing for most workers, but it'll likely have nasty side effects when it comes to the most marginalized and vulnerable workers

[1] https://www.sfexaminer.com/news/new-rules-for-contractors-ha...

username903• 7 years ago

Every worker should have those basic protections.

So why tie them to a job? Why force people to work full time for a single employer to enjoy them? Why not do like most countries and guarantee these protections for everyone instead?

SkyPuncher3• 7 years ago

Anybody else think it's interesting that this article is so focused on AB5 - and almost completely ignoring her employer's responsibility in this.

What's blocking her from being hired in a properly classified position on a part time basis?

gregd15• 7 years ago

Because companies complain that it adds 20% - 30% to their labor costs.

toomuchtodo• 7 years ago

More accurately, the loophole they've been using to obtain a labor discount (employee misclassification) has been removed.

godzillabrennus• 7 years ago

Not to mention employee labor and liability is basically a personal guarantee for a business owner.

Hard to justify committing to wages if your business is new or volatile.

Easier to just not start a business. California has great programs to help the poor with food, clothing, and energy. At some point it becomes easier to just stop working and live off the state.

Then you vote for the party that will let you keep your free stuff.

Then you have a land where costs are high and the people are mostly poor. You have California in 2019.

https://www.politifact.com/california/statements/2017/jan/20...

kasey_junk7• 7 years ago

Cost is the most obvious one. There is likely no shortage of writers to take the position that aren’t governed by this law.

manderson89• 7 years ago

"Him"? The writer is named Rebecca...

SpicyLemonZest2• 7 years ago

What makes you think anything is blocking her? The article makes it sound like she just doesn't want to be hired as an employee. The company's original post (https://www.sbnation.com/2019/12/16/21024100/thank-you-calif...) encourages everyone to apply for roles in their new org structure.

rolltiide• 7 years ago

We used to hire employees in California, and even with letting an external payroll company do everything we were still getting civil rights posters like every week.

Who were they for? Where were they supposed to go in our coworking space? When we let the payroll company go the administrative burden was such a sidequest to our actual mission that it was untenable. To clarify we ended employee status alongside getting rid of the payroll company. 1099 is just simpler and for the federal government's rules the discretion of the people we worked with fit the requirements for contractor status.

So now removing choices for even having employees or not really makes it unattractive for businesses under a certain size.

I think they should consider that.

pcmonk2• 7 years ago

For another perspective, SB Nation's announcement: https://www.sbnation.com/2019/12/16/21024100/thank-you-calif...

Notably, this thread is full of people blaming SB Nation for not converting IC's to employees, which is exactly what they say they're going to do, though not everyone will end up with a job at the end of it.

iudqnolq2• 7 years ago

You're probably right, but I see nothing about them not hiring some people in the announcement. They do say some people will probably not want to leave their current jobs. They also say everyone will get some amount of money for notice. Sounds overall pretty good of them, if they actually do it

drawkbox8• 7 years ago

California does not recognize non-competes [1][2]. California is also a nebula of innovation and great companies because of it, with creator/developer freedom.

California will do things for labor other states won't, like not allowing non-competes and AB5. Will there be some situations that aren't ideal? Sure. Will it ultimately help more people not get taken advantage of in the labor market who need it most? Yes indeed.

The 'editor-in-chief' as a contractor seems like stretch reason to get offended by AB5. They could easily be a part-time employee, deny all benefits and nothing would change. But AB5 helps the people that don't have the flexibility of OP.

California AB5 'came for me today'
As with many of my colleagues today, because I live in California, I was just told that I can no longer hold a paid position with SB Nation. This means that I will be forced to step down as Editor-in-Chief of Mavs Moneyball as of March 31
For those who don’t know, California’s legislature recently passed a law, Assembly Bill 5, codifying a California Supreme Court decision that classifies many independent contractors as full-time employees. While there is a small carve-out in the statute that allows for paid writers or editors to continue to produce a very limited amount of content per company, it’s not nearly enough, and it would be hard for me or most of my colleagues to fit in that small box.

The OP makes it sounds like California kicked in the door and ripped their keyboard from their hand and never allowing them to work for the publisher. She can easily be part-time, start a business for it and contract, as an 'editor-in-chief' you'd think that is more involved. With the limit of 30 articles a month is about 3 per month and that is per company, other writers that write for many publishers will be fully fine with this. I doubt most writers that write more than 3 articles a month would mind if they got extra protections, the editor-in-chief is a different thing entirely.

I can understand why businesses are mad about this but not labor or contractors. California makes it easier for contractors to work by not allowing non-competes [1][2].

Non-competes are the most anti-American, anti-business, anti-innovation, anti-labor things in America. Support California taking a stand against the powerful and authoritarians that want essential slaves in the worst form of this.

I have no doubt that SCOTUS will eventually have to deal with non-competes. With how a conservative leaning SCOTUS sided on the favor of business with arbitration, and denying access to the legal system for many, it doesn't look good [3]. Having California as an example of a non-compete state is great to have in that it is innovative and contractors don't have to deal with that in California. I have to fight non-competes in every project that isn't based in California. Lots of these companies want developers to sign a 2-year non-compete for a 3-6 month project which is completely asinine.

California ultimately does more for workers and low/middle class than any other state as well as business being a competitive and innovative magnet. With a market this large they are using their leverage for good. But there will always be the haters and FUD from big business and occasionally some that disagree. Ultimately these policies are better for America and labor.

[1] https://www.upcounsel.com/non-compete-california

[2] https://en.wikipedia.org/wiki/Non-compete_clause#California

[3] https://www.cnbc.com/2019/04/24/scotus-conservatives-limit-c...

ars7• 7 years ago

Will it ultimately help more people not get taken advantage of in the labor market who need it most? Yes indeed.

No it won't. Who exactly will it help? Converting someone to an employee doesn't magically change their income.

To make up for extra benefits an employee receives, their base salary is lower. The final total is unchanged.

The only difference is now there is a lack of flexibility: An employee needs a certain number of hours, all the benefits are based on it.

But if either party needs flexibility, well, now they are stuck. They can't offer benefits because they don't know how many hours, but they can't make them employees because they have to give benefits.

This law only has downsides. It will help exactly no one.

drawkbox8• 7 years ago

No it won't. Who exactly will it help? Converting someone to an employee doesn't magically change their income.

Contractors will be helped in many fields and industries. Outside of writing and development/technology, most contractors are messed with and not given their fair shake. This will change that.

The only difference is now there is a lack of flexibility: An employee needs a certain number of hours, all the benefits are based on it.

If it is too tight laws can be adjusted. The point is it will help more that it will hurt.

You can still be a contractor in California that doesn't have to sign a non-compete, which is worth more than anything to a contractor.

This law only has downsides. It will help exactly no one.

Are you speaking from a contractor viewpoint or business? The contractor/labor/worker viewpoint greatly is improved with leverage.

Companies have to be more careful with contractor classifications for people that don't want it.

If someone wants to work part-time and deny all benefits that is fine. Yes there are things like insurance and more paperwork but you don't think people will innovate and create products to make that easy in California. This is an opportunity.

This is California, without non-competes, where competition and innovation happens, and there is still some leverage on the labor/worker side of the equation. Big businesses hate that so California is incessantly attacked by corporate and authoritarian powers that be. America still has one state fighting for labor, California.

gregd15• 7 years ago

What laws exist that say an employer has to provide benefits for their employees? A lot of employers offer flexible schedules and a flex schedule can be negotiated during the hiring process.

neonate2• 7 years ago

The OP makes it sounds like California kicked in the door and ripped his keyboard from his hand and never allowing him to work for the publisher. He can easily be part-time

The author is a woman.

drawkbox8• 7 years ago

Oops corrected, I did assume because of sports. Should have looked at the byline.

iudqnolq2• 7 years ago

Just in reply to your point about "editor-in-chief", sbnation's thing is that every sports team gets their own "publication" that covers them, with their own "editor-in-chief". They have more than 500 of them.

Working with the definition of a level levels.fyi was talking about here earlier today, an sbnation editor-in-chief that wanted to be hired by another media outlet might enter at the bottom rung or close to it.

foogazi2• 7 years ago

California does not recognize non-competes

This has nothing to do with non-competes

kasey_junk7• 7 years ago

Were contractors covered by the Vox Media Union?

BooneJS• 7 years ago

Complex systems are, in fact, complex.

big_chungus5• 7 years ago

While I was a student, I was employed, part-time, as a contractor doing software development. It was incredibly beneficial; my employer was very flexible and I worked as I had time. This paid a significant portion of my college expenses and gave me invaluable work experience without which I would not be where I am today. I would have a worse job and more debt. This California law is ridiculous. Under it, I could not hold such a position. It is not the place of the state to dictate the terms of a private contract between two consenting parties.

watwatinthewat3• 7 years ago

Why does this prevent that experience from happening? That's a genuine question, as I perhaps/probably don't know enough about the law to get it.

dariusj182• 7 years ago

I'm not sure what this law would change about being able to work part time with flexible hours. Could you elaborate?

big_chungus5• 7 years ago

Sure. The new bill establishes that an employer must demonstrate the following requirements to hire someone as a contractor (quoting from the bill):

* 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

I wouldn't have been even close to meeting those. I had some freedom about how the work was performed, so number one is a maybe. I was doing software development for a software development company, so numbers two and three are hard "no"s. As a college student, I didn't care about insurance, or vacation time, or being a full employee. I came to a mutually-beneficial agreement with my employer, and this bill would have prevented that.

Also of note: California bans un-paid internships in the "free labor" sense. While this sounds good on the surface, it's not. I held internships in middle and high school that were awesome experience when I had time to burn, and those proved incredibly helpful in landing later paid internships, contract work, college acceptances, and salaried jobs. They were incredibly helpful, and I learned a ton, but I couldn't have done that were I a resident of California.

This bill is written to target the gig economy. Many college students I know pay make good money doing gig economy work. And many working-class teens I know who typically work fast food can now use gig economy shifts to fill in when they can't get shifts lined up working fast food or other typical jobs. This bill is awful for almost everyone, because it removes opportunities without providing alternative ones. The state does a great job of taking them away, and a comparatively-horrible job of creating them. Were I a teen-age Californian high-schooler, I'd now be looking at working fast food rather than software development.

gregd15• 7 years ago

Was this a work study program or internship through your college? Or did you just take a contracting position at a company to help make ends meet?

big_chungus5• 7 years ago

I held some un-paid internships in middle school and early high school. Learned programming, took software engineering classes, and proved merit w/un-paid internships because hiring a kid is risky. Late HS and college had contracting positions to make ends meet (esp. in college, they took a big chunk out of tuition).

drawkbox8• 7 years ago

AB5 wouldn't affect you under the "Professionals" or "Professional Services" label. [1][2]

Software contracting is largely excluded especially freelance.

The employer would just have to follow the AB test which is beneficial to contractors:

Under the ABC test, a worker is presumed to be an employee unless the company proves that the worker:

(A) Is free from the control and direction of the company in performing work, both practically and in the contractual agreement between the parties; and

(B) Performs work that is outside the usual course of the company’s business; and

(C) Is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the company.

If there was ever any issues with (C) which would be the only possible conflict, software/product/creative/engineers can get LLCs to to corp to corp contracting.

[1] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

[2] https://www.dwt.com/blogs/employment-labor-and-benefits/2019...

big_chungus5• 7 years ago

Your assumptions are incorrect; I have already showed why I wouldn't have been able to work in a prior comment: https://news.ycombinator.com/item?id=21810451

You're wrong that the "ABC" test is beneficial to contractors. I was doing software development for a software development company, so I wouldn't have passed B. As you have already agreed, I'd have failed C. Finally, I may or may not have met A.

Your response to this is, "get an LLC?" You think gig economy workers and high schoolers are capable of this? As you said, that's fine for professionals with those kinds of resources and expertise (or the money for a lawyer). It's also different paperwork for the company. Showing that the best solution is to bypass the law via a loophole also doesn't exactly extol it's virtues.

vadym909• 7 years ago

Consider yourself collateral damage- just like full-time employees were when companies decided to hire ICs and not pay them benefits.

The real problem unfortunately lies in the fact that the Govt decided the best way to provide people benefits was through the employer.

purplezooey• 7 years ago

"...not work with California-based independent contractors ... I don’t blame them at all."

Wait a minute. Yes, blame them. This is a stance against paying benefits and sustainable wages for employees.

Jamwinner• 7 years ago

Meet globlization. This is the issue.

RiOuseR• 7 years ago

Here we go. A law meant to protect employees is going to lead to more unemployment. You see it with SF wait staff laws and now more and more places either don't hire wait staff or don't hire as many as they used to.

The state is off its rocker yet again

dmode• 7 years ago

There will be some unintended consequences of this law, and I am pretty sure the legislature will adjust and evolve. But I find it weird that there are businesses who just wants to get way by outsourcing the core part of the business to contractors. What is the point of employment law then ? Supercuts is one big example of that (and they got an exemption from AB 5).

scarejunba3• 7 years ago

The real problem is that California should clearly have just added these guys to the exclusion list (which is already pretty massive) considering there's such a large fungible labour force in this market.

California’s Assembly Bill 5 came for me today

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