An Assembly Bill 5 Update – Pacific Research Institute

An Assembly Bill 5 Update


Humorist Will Rogers regularly uttered world-class comments, but few of his eminently quotable remarks can compete with his observation that a deadlocked Congress which can’t act “is the greatest blessing that could befall this country.” It’s tempting to say the same about California’s Legislature.

But it’s back, having reconvened on July 27 for a session that won’t go beyond the end of August (absent the Governor calling a special session). Is that enough time to at least cut out some of the harmful effects of Assembly Bill 5, probably the worst bill passed and signed in California in at least two last two decades?

AB5 virtually outlawed independent contracting and freelance work in California. It was aimed at app-based companies on behalf of labor unions, which have been losing membership and clout in recent decades. The purpose was to force Lyft, Uber, DoorDash and others that rely on contract workers to run their businesses to hire drivers, who would then have the benefits government demands employers provide.

Workers can remain independent contractors and freelancers, but only if their “gig” jobs meet the requirements of an “ABC test,” which was concocted by the California Supreme Court in a case in which the justices adopted a novel legal standard to determine worker classification.

Given that few contract and freelance workers can meet this standard (of course it was set up to ensure just that), app-based drivers weren’t the only workers caught in the legislative dragnet. The livelihoods of musicians, writers, barbers, artists, commercial fishermen, travel agents, translators, therapists, truckers and many others were suddenly in jeopardy when AB5 became law on Jan. 1 of this year.

After a furious public response, Sacramento had to admit it was a far-from-perfect policy. Consequently, nearly three dozen pieces of AB5-related legislation, including a bill from Republican Assemblyman Kevin Kiley that would have suspended the law, were introduced before the end of February. While the law remains on the books, there have been a few developments – not all of them positive – of note. They include:

  • Passage in the Assembly of AB 2257, a bill to “additionally exempt musicians or musical groups for single-engagement live performances along with ‘certain occupations in connection with creating, marketing, promoting, or distributing sound recordings or musical compositions.’”
  • The California Labor Commissioner’s Office took its first legal action to enforce the law, suing a car wash company in Bellflower on the grounds it misclassified at least 100 workers as independent contractors. The California Chamber of Commerce says the suit “will likely not be the last AB5 enforcement lawsuit from the California Labor Commissioner.”
  • A Sept. 1 court date with the U.S. Ninth Circuit Court of Appeals, which will hear arguments over whether a preliminary injunction granted by a federal district court blocking California from enforcing AB5 against independent truckers should remain in effect.
  • A Los Angeles Times op-ed that says the law poses a “dire” threat “to California newspapers serving communities of color” because “if the ethnic news media were forced to turn their freelance contributors into staff reporters, many would have to scale back their coverage or simply fold.”

With only a little more than a month in session, lawmakers are streamlining their legislative agenda, pulling bills they don’t anticipate getting to in 2020. Will senators make it a point to vote on AB1850 and AB 2257, both of which were unanimously approved in the Assembly? Neither is a panacea, but as many as 2 million Californians, the number estimated to be affected by both the court ruling and the law, would be grateful for some relief, even if temporary.

During a July 2019 hearing before the Senate’s Labor, Public Employment, and Retirement Committee, Assemblywoman Lorena Gonzales, the San Diego Democrat who was the primary author of AB5, said “I anticipate we’ll be working on this for a few years.” An accurate though calloused statement, it’s an inadvertent full disclosure that the legislation’s sponsors and supporters had no regard for those who would be hurt by a truly lousy law. They knew it was so flawed they would be wrestling with it beyond 2019, yet they stubbornly produced a nasty piece of legislation. They should have admitted they were wrong, and in that moment shut it down.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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