Independent contractors

California's Job-Killing A.B. 5 Scaled Back, but Only for Some Professions

Rideshare drivers and delivery people are still going to have to beg voters to let them work.

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The California law that devastated the livelihoods of freelance and contract workers across the state hasn't been repealed, but it has been significantly weakened.

Right before Labor Day weekend, Gov. Gavin Newsom signed into law Assembly Bill (A.B.) 2257, written by Democratic Assembly Member Lorena Gonzalez, adding many occupational exemptions to the now-infamous A.B. 5.

A.B. 5, passed in 2019, attempted to codify who in the state was exempt from state laws mandating who counts as an "employee" of a company and what benefits the company must provide them. It controls who is permitted to be a freelance or contract worker. And Gonzalez wrote her initial bill to be extremely restrictive, threatening to wreck the state's entire freelance economy because she and her union backers wanted to go after massive rideshare companies like Uber and Lyft.

Gonzalez's bill didn't stop with rideshare drivers. It was a wild spray of buckshot that hit everybody from freelance journalists to photographers to translators and transcriptionists. A judge ruled back in January that truckers were exempt from the law. California's many freelance writers tried to get Gonzalez to understand that the law was hurting them and causing them to lose work but she was insistent that "these were never good jobs," deliberately oblivious or uncaring of the reality of how many industries work. In her mind, the only reason people didn't have traditional jobs with state-mandated benefits (and union memberships) was because selfish employers were taking advantage of them. In reality, many people enjoy the flexibility of freelance work and depend on multiple sources of income, and it's often extremely unrealistic to expect that every business can afford to convert all of its freelancers and contractors to employee status.

But it appears now that Gonzalez has relented to most of the louder voices. A.B. 2257 exempts freelance writers, journalists, photographers, and editors from A.B. 5's restrictions, along with artists, musicians, translators, some landscapers, some consultants, some independent workers in real estate and insurance, and a few other professions.

Note the absence of rideshare drivers and delivery people from this list. Of course they wouldn't be in this bill. The entire point of A.B. 5 was to kill the rideshare industry in California, or at least drive the costs so high that they can't really compete against the taxi industry or undermine labor organizers. Gonzalez owes her political career pretty much entirely to public and private labor unions. The purpose of A.B. 5 was to game the system against union competition.

Californians will get to decide for themselves in November whether rideshare drivers will be allowed to remain freelance contractors. Proposition 22 will, if passed, allow rideshare and delivery drivers to be classified as independent contractors under the law. Both Lyft and Uber have threatened to leave the state if they're forced to hire on all their drivers as employees.

It's rather telling that Newsom signed A.B. 2257 into law all by itself, with no fanfare or signing statement. Gonzalez put out a statement saying that A.B. 5 had not been scaled back but rather that the new law "made clear" the relationships between employers and those who want to work independently. She added that the new bill "was a product of robust dialogue over the last year with workers and businesses from every part of the state," which suggests that A.B. 5 originally was not. It's almost as though Gonzalez and her compatriots don't want to admit that they passed a bill into law that threatened the livelihoods of thousands of Californians.

Unfortunately, they didn't repeal A.B.5 entirely, leaving in place a system where the government gets to decide whether you can work as a freelancer or independent contractor based on your chosen profession, your influence in Sacramento, and your ability to publicize your grievances in a way that politicians cannot ignore.

NEXT: Repairing the Rule of Law: A Post-Trump Agenda

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  1. Ah California. This is only the beginning. They have a slew of props to shoot themselves in the foot in the upcoming ballot.

    1. So Californians are going to vote on a proposition that removes the following from their constitution:

      (a) The State shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.

      1. Oh, yeah, I forgot about that. Insane.

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  2. Gonzalez put out a statement saying that A.B. 5 had not been scaled back but rather that the new law “made clear” the relationships between employers and those who want to work independently.

    I think the new law was also intended to make clear the relationship between the rulers and the ruled – everything you are allowed to keep, you are allowed to keep only at our sufferance. Are we not kind and benevolent masters?

    1. Prey they do not pray for us any further.

  3. California needs a proposition to return legislators to the old part-time jobs, like Texas is now (a single 100 day session every two years?), and/or declaring all legislators as contract workers with no benefits, no pension, no security detail, no staff, no company car, and very little pay (I think New Hampshire pays $100 a year).

    1. CA needs a proposition to outlaw propositions.

      1. And let the legislature run roughshod over us? AB5 wasn’t a proposition. While the voters are ignorant doofuses, at least they aren’t politicians.

        1. Yeah, better a proposition to outlaw the legislature. While I think the voters would still pass most of the same garbage the assembly does given the opportunity, they are at least limited by the relative difficulty in getting a prop on the ballot, and only being able to vote on them every 2 years

          1. If you just made it so that props aren’t valid unless x% of registered voters vote on it it solves a lot.

            Most people aren’t going to turn out for every little issue, so most of the props would just get voided. Occasionally something like legal pot or higher property taxes would come along and people would actually care enough to go vote about it.

            This is in combination with dissolving the legislature. The only way to make new laws is via ballot proposition, and you have to convince a shitload of people to vote on it for it to be valid.

      2. There ought to be a law…against saying there ought to be a low.

        1. How about this? “No state shall pass any Law impairing the obligation of contracts. No exceptions” Revolutionary, isn’t it?

    2. Yeah, NH pays $100/year to legislators. Plus something for expenses and you get an office. But nothing you can live on.
      I think the part I like best about the NH sytem is that there is a 2 year budget cycle and every state level office has a 2 year term.

  4. We Koch / Reason libertarians shouldn’t criticize California. After all, our open borders agenda is explicitly designed to transform the US into 50 Californias. Soon every state will be under single-party Democratic control, with high levels of both racial diversity and economic inequality.

  5. My prediction:
    November 2020: Prop 22 fails
    December 2020: Uber and Lyft announces they have no choice but to cease operations in California
    March 2021: Someone realizes there is no “substantive difference” between taxi and ride-share drivers.
    April 2021: Taxi companies are quietly granted an exemption from AB5.

    1. I mean, that’s what happened for journalists and everyone else. This was always meant to be an anti uber/lyft bill. Everyone else was an accident.

      1. Nah. Uber/Lyft brought it to the fore here and now, and taxis and unions have government in their pockets, but governments on all levels have been after the self-employed for a long time. It’s about fees and taxes. Governments don’t trust us privates with paying our own taxes and much prefer payroll withholding. Make sure we pay our fair share and all.

        1. True, revenue matters, but don’t underestimate the relevance of unions. In Lorena Gonzalez’ dream world, all labor is organized, and dependent on the whims of legislators like her.

    2. Interesting hypothesis. It sounds plausible to me. Whether likely or not, I do not know; this is California.

    3. Pretty sure the taxi industry in CA is unionized so they don’t need an exemption. The whole point of AB 5 was to eliminate, or at least severely restrict, their competition.

    4. My prediction:
      November 2020: Prop 22 fails
      December 2020: Uber and Lyft announces they have no choice but to cease operations in California
      March 2021: Someone decides that transportation is a human right
      April 2021: Uber and Lyft are given taxpayer subsidies to cover the cost of classifying drivers as employees and return to CA as an essentially state-owned service under CalTrans

    5. the substantive difference between taxi drivers and ride share (who uses them to share rides anyway? what a dumb name) drivers is that the ride share drivers speak English, have nicer cars, show up on time and don’t take you the long way to run up the fare.

      1. I believe they’re called “ride sharing” because if you’re an Uber/Lyft driver, you share your car with a rider.

        1. No, it was originally intended to share the cost of a hired car with other people. The original service offered by Uber was UberBLACK, which is significantly more expensive than a taxi, and was not expected to the driver’s normal daily driver car. The “regular” Uber came later, and people started using their personal cars, resulting in the cheap Uber rides we know and love today

  6. And thus you see the entire point of tyranny. It is not to have tyrannical rules so much as to grant exceptions to them. Allowing exceptions like this is even worse tyranny than uniformly applying the law. At least applying the law has the virtue of consistency. Real tyranny is when government grants exceptions to it’s tyrannical rules.

    1. I read something a long time ago from someone who immigrated to the US from the Soviet Union. He said the fundamental difference between there and here was in the US you are allowed to do anything unless there is a law specifically saying you can’t. In Russia, you are not allowed to do anything unless there is a law specifically saying you can. It speaks to exactly the kind of tyranny you describe, and the climate CA seems intent to create in their state

      1. I have been using the phrasing “We are quickly going from what is not prohibited is permitted to that which is not permitted is prohibited.”

  7. It was a wild spray of buckshot that hit everybody from freelance journalists to photographers to translators and transcriptionists.

    I think we can all agree that we need common sense legislator control.

    1. Biden told us that firing shotguns off randomly is the best way to be a responsible gun owner. This legislator was just following that advice.

      1. In all fairness to Biden, he probably plagiarized that story from someone else.

  8. How many more exceptions to this law does there need to be before it becomes a bill of attainder?

    1. I mean they pretty much admit it started as a bill of attainder and they worked backwards from there

  9. The Uber/Lyft provisions are going to be the ones the general public actually cares about though. No one wants to go back to the crapshoot of calling a cab after seeing how good Uber is.

    If Uber/Lyft were smart what they’d do is just replace the app in California markets with a simple landing page with this legislator’s contact info. “For more information about where your ride is, please call xxx-xxx-xxxx”.

    1. The problem is the average big city voter in CA doesn’t think things all the way through. They think the only thing that will change is that those evil corporations will no longer be able to deny their workers a “living wage” and “fair treatment” (neither term being well defined, but they feel good don’t they?)

      They don’t believe anything will change on their end regarding the price and availability of Uber/Lyft services

      I believe the only way for them to prevail on the ballot measure will be for them to actually cease operations ahead of the vote (which they might have to anyway, as the current stay on enforcement expires in October) which would effectively turn the prop into a “bring back Uber” vote

      1. Yeah that’s what I was getting at. Shut down pre-vote and direct all your angry riders to the dipshit responsible for this mess.

  10. It’s shaping up to be a battle between the oligarchy and the government. However it could also end up being an alliance of both against the people. For example, the Chan Zuckerberg Initiative is funding ads for various socialist policies in CA (tax more, decriminalize) to appease the masses. Of course, I’m all for decriminalization but it must be the right things: drugs, weapons, sex. Not larceny.

    These billionaires know the people are coming for their money – and they’ll get it one way or another. So they appease the people with socialist policies but of course the appetite is insatiable. The solution isn’t to fund charities and big government but instead to create retirement/voter colonies. They can be built cheaply and will ensure conservative wins for generations – as the robots take over gradually. (It’s the path to paradise without nuking ourselves in the process.)

  11. They can work.

    They just need to follow the rules and stop being freeloading parasites.

    1. Says a man who is unemployable and has never held a paying job in his life. Your entire existence is being a parasite Rev.

    2. You told us that you didn’t learn how to capitalize words until the 5th grade.

      Try to understand, that means we know you’re dim.

      1. That certainly explains why he’s constantly repeating himself like a toddler.

    3. Freeloading = consenting adults entering a business transaction to provide an agreed-upon service at an agreed-upon price, using resources provided by the parties themselves, except for such common resources (such as roads) that are used under equal terms with all other users.

    4. “They just need to follow the rules and stop being freeloading parasites.”

      Lemme guess, Arthur. You are one of rideshare drivers’ betters, aren’t you?

  12. So a Mexican came after their jerbs. Ironic?

  13. Yay now all the freelancers are at the mercy of the bureaucracy! Progress!

  14. Of course California decided to exempt creative types. They tend to be liberals.

  15. If the voters of California don’t reject this thing in its entirety, I can’t wait to see their reaction when they return to the era of urine-stinking cabs driven by psychopaths who take an hour to show up. That’s what I would call “social justice”.

    1. I took a cab in LA after a flight. In the cabbies defence it was a really good soccer game (I kid, there is no good soccer game) he was watching during the drive

  16. It’s California. Who cares?
    You vote for socialists, you get socialized.

    1. The problem is these fuckheads are once again migrating en masse to less pozzed areas and infecting stable, livable, high-trust communities with their special brand of political AIDS.

      Trump would be doing the country a huge favor by nuking the entire SF-SD land mass so these assholes can’t shit up other peoples’ nests.

  17. “Right before Labor Day weekend, Gov. Gavin Newsom signed into law Assembly Bill (A.B.) 2257, written by Democratic Assembly Member Lorena Gonzalez, adding many occupational exemptions to the now-infamous A.B. 5.”

    If they want to target particular companies, why don’t they just name them in the bill and get it over with? It’s not like they give a shit about what the workers want, is it?

  18. The only thing that is important to many is that Uber make higher profits by underpaying its employees, by using a scam of not calling them employees. Perhaps a competitor will come along that will actually pay their employees instead of giving almost everything to the executives, but until that happens, we need laws to protect employers who duck their responsibilities under employment laws by redefining employment.

    1. There was a redefinition of employment, but it was by the California legislature, not by Uber or Lyft.

    2. Under payed according to who and by what standard? Uber isn’t actually making money. They are bleeding money. If the ass hats in California think uber drivers should be paid more they don’t need the legislature. They can simply tip to ensure a “fair wage”. Of course that isn’t what they want. They want the same service they get today at the same price with drivers paid much more money from profits uber doesn’t have.

      The state deserves to lose uber and lyft so I kind of hope that is what happens.

    3. Yeah you would suck the dick of government just to get payback.

    4. These two companies offered to pay $21/hr to drivers going to a pickup or on a ride.

      CA government rejected the offer, because this isn’t about the drivers at all. It’s about the unions.

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  21. Sorry she is not wrong. Rideshare companies are taking advantage of their employees. But we are all getting bent over by companies anyway…

    1. Then California needs to get rid of the law that forces people to drive for Uber and lyft.

    2. its unfortunate for some but the employees ‘being taken advantage of’ are in competition with people who can and will happily do those jobs for the current compensation.

      Same thing with the guy who has 4 kids and ‘can’t afford’ to make $7.25 packing groceries, he has to compete with a 17 year old kid who just wants money to buy fast food. the solution is to find a way to make that guy’s labor actually worth more, not just dictate a minimum wage.

    3. Everything is so terrible and unfair.

    4. They’re an employment service for illegal aliens. Uber, Lyft, GrubHub, etc. have mostly illegals running around doing the jobs that used to be available to American college students and low-skilled legal minorities.

      Because they’re website/app-based, there’s no W2 employment verification. No one at rideshare/delivery headquarters actually meets the employees and verifies the ID that’s presented. And that allows massive identity fraud.

      Next time you get a delivery from one of these services or take a “rideshare”, ask to see the drivers license, car registration, or ask to take a photo of the driver. Watch them freak out. Because they’re illegals.

      The companies know this. That’s why they want no regulation. And it’s why they can get the drivers to work for any price they want. It’s why they can offer services cheaper than legitimate American companies that follow laws.

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