Background
The bill makes the decision of a court case, Dynamex Operations West, Inc. v. Superior Court of Los Angeles, into law. The Dynamex decision proposed an "ABC test" to help distinguish between an independent contractor and an employee.
In order to correctly classify independent contractors, the test confirms:
(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(B) that the worker performs work that is outside the usual course of the hiring entity's business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
The disputed point for freelance journalists is the "B" requirement that requires a person to perform work that differs from the employer's usual course of business. Freelance writers perform the same job as staff writers without the constraints of set working hours and having to be in a newsroom or office. Due to this, media publications cannot use the same argument as companies who maintain that their business is to provide technology to enable rideshares rather than a taxi service.
Real-life effects
AB-5 drastically limits the number of articles a California writer can produce for one publication to 35. Originally, an earlier version of the bill limited freelancers to 20 articles yearly per publication. This number all but prevents publications and media companies from hiring Californian writers to do weekly columns.
The limit of 35 articles annually may seem arbitrary, and it is. The bill's author, Assemblywoman Lorena Gonzalez, stated that this figure is based on the assumption that weekly columnists are like part-time workers, so 35 is the estimated portion of annual submissions that a part-time writer would make. The theory behind the limit is that it will encourage media companies and publications to hire California writers as part-time or full-time employees, rather than contractors, so that they can enjoy employee benefits like disability, unemployment and Social Security. However, due to freelance writing being a career that can be done remotely, critics say it will result in California freelancers losing out on jobs to writers in states without these restrictions.
Given the widespread impact that AB-5 will bring to the state, it will be interesting to see how the bill is actually enforced. Its enforceability begins January 1, but there are still many lingering questions from the bill's critics that remained unanswered.
If you have questions about how AB-5 impacts you as an employer or freelancer, ask a lawyer.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
