California's gig worker law: Not as simple as ABC
AB 5, the bill whose purported mission was to restore protections to workers, is now being decried by some as a job-killer.
AB 5, the bill whose purported mission was to restore “important protections to potentially several million workers who have been denied these basic workplace rights that all employees are entitled to under the law,” is now being decried by some as a job-killer.
A lawsuit has been filed against the state on behalf of freelance writers and photojournalists, many of whom have been pink-slipped by media companies that do not want to convert them to employees. At the same time, ride-sharing companies are attempting an end-run with a ballot measure designed to carve them out of the law.
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These two efforts are really opposite sides of Alice’s looking glass. The ride-share drivers are exactly the class of workers on which the AB 5 was predicated. They do not have unique, specialized skills, cannot negotiate with Uber or Lyft, are doing the same work those companies do, and both the worker and companies can end the relationship at any time. Drivers spend significant time in unpaid waiting mode and incur costs that many do not factor into their pay (such as wear and tear on their vehicles and auto insurance). Freelance writers and videographers are different, and the law reflects that difference with a specific exemption for those working under a contract for “professional services.”
The bottom line is that the law, which took effect January 1, is anything but clear and settled. As thousands of Uber drivers sue to be classified and paid as employees, many others seek to remain independent contractors. Certain freelance journalists and photojournalists claim the limitations in the new law have put them in a precarious position, and they are fighting to stop its application to their work.
For many workers, AB 5 is an improvement. When Dynamex Operations West v. Superior Court was decided in April 2018, there were no exclusions; all independent contractors throughout the state became subject to the “ABC” test. These workers were automatically presumed to be employees unless the company met all three prongs of the “ABC” test.
AB 5, which codified Dynamex, changed this dynamic. Through intense lobbying and after extensive debate, certain services and professions were expressly carved out and made subject to the earlier test set forth in S.G. Borello & Sons v. Dept. of Industrial Relations (1989). Other categories of workers became subject to a Borello “plus” standard, which added several prerequisites before applying the Borello test.
Among the “professional services” granted an exemption under the Borello “plus” test were “[s]ervices provided by a still photographer or photojournalist who does not license content submissions to the putative employer more than 35 times per year” and “[s]ervices provided by a freelance writer, editor, or newspaper cartoonist who does not provide content submissions to the putative employer more than 35 times per year” (California Labor Code § 2750.3 (c) (1)).
To qualify for the exemption, workers must have their own business location and business license, set their own rates and hours, perform services for more than one hiring entity, and regularly exercise judgment and discretion. These are not difficult hurdles for most freelance writers and photographers to meet. In theory, AB 5 is better for these freelancers than Dynamex would have been, because of the exemption.
However, there is a big fly in the ointment. Unlike other types of professionals, including other categories of writers and photographers, journalists and photojournalists are subject to what seems to be a random 35-submission limit. This limit, according to the lawsuit brought by the American Society of Journalists and Authors, and the National Press Photographers Association, violates journalists’ First Amendment right to freedom of expression and Fourteenth Amendment right to equal protection:
By enforcing a content-based distinction about who can freelance—limiting certain speakers to 35 submissions per client, per year, and precluding some freelancers from making video recordings—Defendant currently maintains and actively enforces a set of laws … that deprive Plaintiffs’ members of their rights to free speech, free press and equal protection.
Clearly, the battle over AB 5 is far from over. Depending upon the outcomes of the writers’ and photographers’ lawsuit, and the lawsuits that are guaranteed to come on the heels of any ride-share ballot measure, we can expect more industries to challenge the law and/or seek additional exemptions. At the same time, other states that have adopted ABC tests for independent contractors are sure to be watching closely what happens here. It’s possible that media companies, with prospective employees in a number of states, will be forced to rethink their hiring strategies. This next year is destined to be a turning point for independent workers nationwide.
Eve Wagner is a mediator and arbitrator with Signature Resolution and a past chair of the Labor and Employment Section of the Beverly Hills Bar Association.
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