California Expands Independent Contractors to Music, Photo, Freelanceers

Wednesday, September 9, 2020

Final Friday, September 4, Governor Newsom signed AB 2257, which features a slew of modifications to the now-infamous AB5, which went into impact this yr and codified the strict ABC unbiased contractor take a look at, which we now have addressed beforehand on this weblog.

With this new modification, there are actually greater than 100 exemptions and limitations to the unique regulation, which was aimed toward reclassifying the a whole bunch of hundreds of Uber and Lyft drivers from unbiased contractors to workers. As we now have reported earlier than, AB 5 was authored by California Assemblywoman Lorena Gonzalez (D-San Diego), a former CEO of the San Diego and Imperial Counties Labor Council, AFL-CIO.

Legendary former Democratic Speaker of the California Meeting and Mayor of San Francisco Willie Brown has this to say about AB 5: “If there was a spot to picket organized labor, I’d do it as we speak,” Brown mentioned. “If there was a spot to picket a legislator, I’d do it,” he mentioned. As Meeting Speaker, “I made certain that particular pursuits, irrespective of who they have been — labor or non labor — didn’t make the most of the Legislature,” however he mentioned it was clear this time was not the case.

Music Trade

The newest adjustments to AB5 is the introduction of exemptions for sure music business staff – together with recording artists, songwriters, lyricists, composers, proofers, managers of recording artists, document producers and administrators, musical engineers and mixers, musicians, vocalists, photographers working within the music business, unbiased radio promoters, and another particular person engaged to render inventive, manufacturing, advertising and marketing, or unbiased music publicist providers. The sensible impact of the exemption is that the multi-factor Borello take a look at, relatively than the ABC take a look at, would apply in figuring out whether or not the music business employee qualifies as an unbiased contractor; and AB 2257 offers that, in all situations, any present or future collective bargaining agreements or contractual agreements between the relevant labor unions and respective employers shall govern the dedication of employment standing for these music business staff.

AB 2257 particularly notes that staff in different leisure industries (akin to movie and tv unit manufacturing crews) don’t qualify for an exemption.

Freelance Writers and Photographers

AB 2257 additionally modifies the exemption in AB 5 for freelance writers and photographers, eradicating the controversial 35-submission restrict which had been the topic of litigation. The submission restrict beforehand made writers and photographers who submitted greater than 35 articles or tasks per yr ineligible for the exemption. Now such writers and photographers could possibly be exempt from AB 5 and the ABC take a look at, supplied they meet sure necessities, together with that: (i) there’s a written contract that specifies charge of pay, mental property rights, and an obligation to pay by an outlined time; (ii) the person doesn’t in any other case exchange an worker; (iii) the person doesn’t primarily work on the location of the hiring entity; and (iv) there isn’t a restriction stopping the person from working for a couple of entity.

Different Modifications and The place Do We Go From Right here?

These are simply a number of the adjustments launched by AB 2257. There are additionally a number of additions, adjustments, and clarifications to the business-to-business exemption. The brand new model of the B2B exemption requires that enterprise service suppliers be free to offer providers to different shoppers, relatively than requiring that they supply providers to a couple of consumer. The modified exemption additionally permits enterprise service suppliers to offer providers on to the shoppers of a contracting enterprise as long as its workers are performing the providers underneath the title of the enterprise service supplier and the enterprise service supplier often contracts with different companies.

The referral company exemption – which may apply to the connection between a person, on the one hand, and a enterprise that refers that particular person’s providers to shoppers, on the opposite – additionally acquired an overhaul. For instance, a number of sorts of providers (together with youth sports activities teaching and marriage ceremony planning) have been added to the enumerated exemption record, and the phrase “together with however not restricted to” was added, increasing the scope of providers lined. Additionally, just like the change within the B2B exception, the referral company exemption has been modified in order that service suppliers now should solely be free to offer providers to different shoppers, however they don’t seem to be required to keep up a various clientele. These are simply a few the almost two dozen adjustments to this exemption.

It’s also essential to notice that, whatever the present standing of AB 5, additional change looms on the horizon. Democratic presidential nominee Joe Biden vows on his marketing campaign web site that “he’ll work with Congress to determine a federal normal modeled on the ABC take a look at for all labor, employment, and tax legal guidelines.” If he’s elected president and carries out this promise, AB 5’s hard-fought-for exemptions could very nicely fall by the wayside and all staff all through the nation, together with these in California, could possibly be topic to a federalized ABC take a look at, which can imperil the standing of unbiased contractors in all places within the nation. On this dynamic legislative atmosphere, we suggest working with counsel to find out whether or not your workers and contractors are (and stay) correctly labeled.