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Can AB 5 in California really be fixed?

On Behalf of | Oct 5, 2020 | Employment Law For Employers |

A controversial law called AB 5, signed by Governor Gavin Newson, went into effect on Jan. 1, 2020 — and independent contractors and business owners alike have struggled to adapt. AB 5 was largely aimed at Uber and Lyft (along with any other companies that might eventually follow with similar business models), but it ended up negatively affecting a lot of creative freelancers and independent contractors.

Basically, AB 5 imposed some narrow tests to define who was actually a freelancer and who was an employee, including whether or not the worker in question was performing work that was in the usual course of business for their hiring company. If so, they were to be regarded as employees, with all the benefits that go along with that designation.

An unintended consequence of the bill was that freelance writers, musicians, comedians and others — who long had pursued their craft as independent contractors — were suddenly unable to ply their trades. AB 5 effectively ended the 40-year run of the Lake Tahoe Music Festival, for example, and prevented many companies from hiring freelance writers in the state.

Now AB 2257 has been signed to try to modify AB 5. Under the new rules, freelance writers, photographers, musicians, appraisers, foresters, producers, graphic designers, marketers, promoters and others will be exempt from the rules imposed by AB 5.

While it seems like the new law is trying to hone in on Uber and Lyft (who are still fighting the changes in court), the changes may make it even harder for both companies and workers to determine who is — and isn’t — a freelancer. The rules are now more byzantine than ever.

In these complicated times, it pays to work with an employment attorney. Whether you’re an employer who may be hiring gig workers or a free0lancer trying to make a living, you need to fully understand your position under the law.