Hundreds of California-based freelance writers and journalists will be laid off beginning January 1, under a new law that mandates sweeping new restrictions on how businesses in the state use independent contractors.
Assembly Bill 5, state legislation signed into law by Democrat Gov. Gavin Newsom, will severely transform how independent outlets will cap the number of submissions freelance writers can make per publication to 35 articles per year.
Freelancers will only be able to exceed the 35 articles limit if they are hired as an employee of the publication and join their labor union. While some freelance writers will be hired as part-time staffers, most will lose work.
The measure, which was drafted by Democrat Assemblywoman Lorena Gonzalez, mandates Californians be considered employees of a business unless an employer can verify the work they perform meets a specific set of criteria outlined by a California Supreme Court ruling in the “Dynamex” case, a class-action lawsuit about the employment status of delivery trucks.
In the 2018 Dynamex ruling, the court ruled unanimously Dynamex Operations West, a package delivery company whose clients include Amazon.com, misclassified its drivers as independent contractors rather than employees to circumvent the demands of an applicable wage order and taxes.
The ruling, making it more difficult for companies to rely on freelance or contract work, defines a “worker” as an employee only if their job constitutes the company’s core business, if the bosses direct the way the work is done, or if the worker has not established an independent trade or business.
While professions, including doctors, accountants, architects, real estate agents, travel agents, graphic designers, and investment advisors, are exempt from the strict new rules, the law may be career-ending for freelance journalists who will be capped to 35 content submissions per year per news outlet.
Gonzalez insists she drafted the bill to “create new good jobs and a livable, sustainable wage job.”
Newsom issued a statement after signing AB 5 claiming it “will help reduce worker misclassification,” which puts workers at a disadvantage
“Workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits,” he wrote.
Yet, the new law will predominantly serve as a means to generate more money to the government.
Misclassification of workers as independent contractors costs the state approximately $7 billion in payroll taxes annually, Los Angeles Times reports.
AB 5 gives the state of California authority to file suit against companies over misclassification.
Most publishers did not adhere to the ruling, but some out-of-state publishers began blacklisting freelance writers in California, resulting in a significant decline in their income, according to Columbia Journalism review.
Writers are “freaking out” over the new law’s imposition of the nanny state, according to the Hollywood Reporter, as out-of-state employers are reportedly evading AB 5 by simply disassociating with California freelancers.
“We’re in the process of sorting through the implications right now. Unfortunately, I suspect a number of freelancers will end up with less work from us as a result of the 35-piece limit. I don’t have anything more detailed than that at this point,” San Diego Union-Tribune publisher and editor-in-chief Jeff Light told THR.
“I have heard from clients that they’re just going to avoid working with California freelancers,” freelance entertainment writer Fred Topel told the publication.
Freelancers are reportedly scheduled to meet with Gonzalez twice in October to address their grievance before the law is set into effect January 1.
Gonzalez said she will consider amending the legislation if it does not affect other workers that are subject to the law.
“If somebody comes up with some idea that makes sense, that puts them in a better position, that makes them happier, more fulfilled, but doesn’t affect other workers, I’m open to that,” she told THR.
Employers and freelancers will have to comply to AB 5 for a full year before amended legislation is permitted to go into effect.
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