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Gig Workers

How California's new assembly bill will affect independent contractors across the state

From pastors to strippers, this bill will effect dozens of occupations other than rideshare drivers

What is California Assembly Bill 5?

Assembly Bill 5 is a law passed by Gov. Gavin Newsom on September 18, 2019. It will go into affect January 2020 and is expected to effect the jobs of over a million workers in California. Companies will have to pay an estimated 30% more in labor costs once their workers are reclassified.

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Singer/songwriter Khalibud says AB5 is not beneficial to musicians based in California.
  • "If I don’t have money, I can’t operate in California is basically what you’re telling me with this bill being passed.
    -Khalibud
    Musician
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Khalibud and friends have a jam session at her house.
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Simple as ABC

What is the ABC Test?

The ABC test determines worker classification, independent contractor or employee. It replaces the Borello test, which has 11 factors that determined whether a worker was an independent contractor or employee. The most difficult part of the ABC test is part B, which states that the work is performed outside the "usual course: of the hiring entity's business. Uber has tried to argue that its business is primarily a technology platform, and therefore its drivers qualify for AB5.

Who will it effect?

The law, known as the "gig worker bill," was created to give rideshare drivers the rights that employees are given.  There are professions that are exempt from the bill, namely doctors, lawyers, accountants, and insurance brokers.

The law will however affect janitors, truck drivers, interpreters, and freelance journalists and photographers. Freelance journalists, for example, can't do more than 35 stories for a publication per year. As long as they stay below that number, they're exempt from the law. 

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Ian Firstenberg, freelance journalist, fears how to bill will affect his profession.
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Worker Rights

What rights do independent contractors get?

One of the main reasons AB5 was created was to protect "gig workers" from being denied worker rights that employees received. Companies don't classify many workers as employees because it would cost them another 20 to 30% in labor costs. Independent contractors have to pay their own payroll taxes, whereas employees payroll taxes are covered by their employers.

  • pros

    Workers will be given rights they weren't receiving as independent contractors, shown in the infogram above.

    Big companies will be fined for not providing employees with the proper benefits.

  • cons

    Some workers prefer the flexibility that comes with being an independent contractor, but won't have access to worker rights.

    The bill will hurt smaller business that can't afford to pay benefits for all their workers.

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