California's gig economy law that passed last year is likely to see reforms this year whether they be from the state legislature or voters.
Assembly Bill (AB) 5, introduced by Assemblywoman Lorena Gonzalez, D-San Diego, passed through the state legislature with the backing of union interests.
“Today, we are disrupting the status quo and taking a bold step forward to rebuild our middle class and reshape the future of workers as we know it,” Gonzalez said in a statement after AB 5 was signed into law last September. “As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow.”
Critics contend that while the law was intended to protect workers' rights, it actually has the opposite effect of infringing on rights. While supporters say the intent of AB 5 is categorically in the interest of worker protection, others say the framework in which the bill has solidified these protections may disregard the impacts on small businesses and workers who wish to stay independent contractors for the benefits of self-employment and remote flexibility.
The Dynamex ruling
In 2018, the California Supreme Court ruled in Dynamex Operations West, Inc. v. Superior Court of Los Angeles that it would embrace a standard presumption that all workers are employees rather than contractors. The ruling relied on the so-called "ABC test" that determines the classification of a worker’s status. AB 5 codified this ruling in state statute by mandating the ABC test.
Freelance journalists, however, are one of several kinds of contract workers who have taken issue with the “one-size-fits-all” nature of the law and how it restricts the scope of their annual workload.
On Feb. 6, Gonzalez said she sought to pass several reforms that would remove some restrictions on freelancers and photographers. She also said that she's considering further changes for musicians, small businesses and others, and hopes to develop a news assistance fund that would help small nonprofit arts groups comply with the requirements of AB 5.
Resistance possibly on the ballot
While legislative updates to the law might be coming, multi-billion-dollar gig economy giants are preparing for a fight on the campaign trail this year to guarantee an outcome that they favor.
App-based ride-sharing companies are moving forward with an issue campaign that would ask California’s voters to repeal AB 5. A committee called Protect App-Based Drivers and Services claims to be "a coalition of on-demand drivers and network companies, small businesses, community groups, and public safety organizations."
With companies like Lyft, Uber and DoorDash listed as major contributors, the committee has $110 million in the bank.
Kathy Fairbanks, a partner at the political consultancy Bicker, Castillo & Fairbanks, said that voters will be enticed by their alternative to AB 5 that specifically supports app-based drivers.
"Politicians keep pushing terrible new laws that threaten to take away the freedom of hundreds of thousands of app-based drivers to work flexible schedules as independent contractors," Fairbanks said.
The solution, she said, is a proposal that will "protect the right of app-based rideshare and delivery drivers to choose flexible work as independent contractors, maintaining the freedom to choose when, where, how long and on what platforms they work."
Fairbanks is referring to the Protect App-Based Drivers & Services Act ballot initiative. If voters choose to pass this measure, app-based drivers would be considered independent contractors while promising labor and wage policies specific to app-based drivers.
The committee is currently gathering signatures to be officially certified on the November ballot. To qualify for the ballot, a campaign must first gather an equivalent to 5 percent of the votes cast in the last gubernatorial election. That's about 623,212 signatures.
Opposition campaigns haven't been declared yet. Labor activists and the champions of AB 5 could mount a vigorous campaign against the industry-backed initiative.
Art Pulaski of the California Labor Federation, for instance, is on the record calling the initiative "another brazen attempt by some of the richest corporations in California to avoid playing by the same rules as all other law-abiding companies in our state."
Gonzalez, too, expressed dismay at the proposal's introduction.
"These billion-dollar corporations still refuse to offer their workers what every other employee in California is entitled to: earning the minimum wage for all hours worked, social security, normal reimbursements for their costs, overtime pay, and the right to organize," she said.