California’s gig worker initiative blew a giant hole in its landmark labor law. What’s left?
California’s landmark labor law, Assembly Bill 5, isn’t going away anytime soon.
Despite the passage of Proposition 22, which exempts hundreds of thousands of gig drivers from the act that regulates who gets to be an independent contractor, supporters say they will protect what’s left.
“AB 5 still stands, and we’ll ensure it’s still defended by the state,” said Assemblyman Ash Kalra, D-San Jose, who chairs the Committee on Labor and Employment.
But Assemblyman Kevin Kiley, R-Rocklin, vows to repeal the law, saying he will introduce a bill in January to do so. If his bill won’t succeed, he said he may try to put AB 5 on the ballot in 2022.
“I think voters empathically rejected the premise of AB 5,” Kiley said. “If people are going to deny the efforts to repeal the rest of AB 5, they will have to answer why they are defying the will of the voters.”
The debate over the future of California independent contractors and employees, in other words, is far from over.
A year into AB 5
With the passage of Proposition 22, some say California’s labor landscape in the age of AB 5 has become even more contradictory and confusing.
For example, AB 5 affects community theaters, which hire actors and staff as employees.
“You got theaters going under and arts going under, because of a law that rideshare companies have been exempted from,” said Karen Anderson, a freelance writer in Orange County and the administrator of a Facebook group Freelancers Against AB5.
Anderson said she has identified 400 different categories of jobs still affected by AB 5.
“It’s all the more picking winners and losers,” she said, “and losers are really on the losing end.”
David Townsend, a political advisor for moderate Democrats in the Legislature, said Assembly Bill 5 was a “massively unfair” law that served “the Teamsters” rather than California workers. The bill is “pretty toothless if you take the gig economy out of it,” he said.
But Jill Habig, founder and president of the Public Rights Project, said the law still has a huge potential to lift the standard of living for the state’s low-waged workers, even after tech companies won a carve-out with Proposition 22.
“The job now for worker-led organizations, the Legislature, folks who have been really thinking about low-waged workers is to make sure Prop. 22 is an exception, not the rule,” she said.
What’s left in AB 5?
The Legislature itself made some changes to the law this year with AB 2257, which exempted workers including interpreters, freelance writers, appraisers and musicians in some circumstances.
AB 5 still covers the majority of California’s independent contractors, from maids to truck drivers. To classify those jobs as independent contractors, companies still have to meet what is known as the ABC test, meaning they should not impose control over workers in areas such as their hours. Those workers should also perform duties outside the usual course of the companies’ business.
Yet, efforts to exempt more workers continue.
The newspaper industry got a one-year exemption from AB 5 for its carriers. But with the exemption ending in 2022, the industry is thinking about its path forward.
“We’re still polling our members and researching the issue, talking with legislators to see what options may be available,” said Charles Champion, CEO and President of the California News Publishers Association. “The problem has not been eradicated or solved.”
In some cases, the subject of who’s exempt from AB 5 remains in dispute.
Last year, the California Trucking Association sued the state, saying truck drivers should not fall under AB 5. The association won a temporary injunction barring California from applying AB 5. The state has appealed the injunction to the federal Ninth Circuit Court of Appeals.
In September, Public Rights Project filed a case to the California Department of Fair Employment and Housing, saying an online home services marketplace Handy misclassified its workers.
Handy has said it believes its company doesn’t fall under AB 5 because changes made this year exempt those that provide referrals for minor cleaning and repair work. Jenny Montoya Tansey, policy director at Public Rights Project, said Handy imposes control over workers, such as charging fees for being late or leaving early.
If the Public Rights Project wins the case, Handy workers will be classified as employees. That means those workers could have more protection against sexual harassment as well as more benefits such as paid sick leave, Habig said.
More exemptions?
In an e-mail, Assemblywoman Lorena Gonzalez, D-San Diego and the author of AB 5, said she believes most situations have been covered under changes made this year.
“Any legitimate sole proprietor or individual formed as another business entity can operate as such,” Gonzalez said. “Other than perhaps looking to clarify worker and performer cooperatives — a structure in which a group of workers create a product together and share equally in the profits and no one is actually the “boss” — I believe we have addressed most realistic situations.”
Kalra said he will not let employers seek an exemption from AB 5 so they can get out of their obligation of providing benefits, unless they have a logical reason for further defining the bill or a need for further clarification.
Gina Miller, a partner and an employment lawyer at Snell & Wilmer representing employers, said she could see Proposition 22 opening the door for more industries to seek an exemption at the ballot box rather than through the Legislature.
“The public is now versed in the concept of AB 5, so I guess my question is: Is it really going to really take $200 million for the next industry?” Miller said. “It passed by an overwhelming majority, so it may not take $200 million next time.”
This story was originally published November 12, 2020 at 5:00 AM with the headline "California’s gig worker initiative blew a giant hole in its landmark labor law. What’s left?."
