From interpreters and journalists to pet sitters, California’s gig economy law has independent contractors fretting

 

David Higbee’s work include everything from interpreting between Spanish and English at criminal courts to emceeing and interpreting a live Q&A for a Japanese director at the YouTube studio in Los Angeles. By freelancing for roughly 50 clients a year, he is able to pursue his diverse passions while supporting his family of seven in California.

But Assembly Bill 5, a law that takes effect Jan. 1, 2020, could severely restrict his freelancing career. The law codifies a previous state Supreme Court decision and bans employers from hiring workers as independent contractors unless they meet strict criteria.

The law was designed to protect workers from being misclassified as independent contractors. But as a side effect, it leaves millions of independent contractors in California fretting about their livelihoods. There were approximately 2.8 million independent contractors and gig workers in California in 2016, estimated by the 1099 tax forms, which accounts for nearly 14% of the tax-paying workforce.

According to AB 5, a worker is an independent contractor only if: the worker is free from control by the employer, performs work that’s not central to the employer, and has an independent business of the same nature. Certain professions specified in the law are exempt from these strict criteria.

“We looked closely at every single profession that has come forward asking for clarification,” Lorena Gonzalez, the assemblywoman who sponsored the bill, said in an email statement. “By result, these workers have individual bargaining power and individual leverage, and they are less likely to be abused by a bad employer.”

The media coverage initially focused on rideshare and delivery platform drivers who will most likely be reclassified as employees – although Gonzalez said on her Twitter account that the law was not specifically targeted at them.

But the law will affect independent contractors in a wide range of industries – from interpreters and translators, pet sitters to journalists.

Translators and interpreters

Higbee is one of many translators and interpreters in California who work as independent contractors to agencies – who then connect them to companies who need translation or interpretation for their projects. Freelancing is an established way of working in the industry, as agencies and companies often don’t have enough work for these translators and interpreters in a given week.

AB 5 will require these freelance translators and interpreters to become employees, raising hiring costs for the agencies. Agencies will have to pay taxes, benefits if applicable, and other costs that may incur from making sure they are legally compliant.

But “very few interpreters or translators work enough per week for one specific agency to even qualify for any kind of employment benefits anyway,” Higbee said. Agencies could also replace Californian translators who do remote work with out-of-state independent contractors in order to avoid the higher costs.

More fundamentally, many freelance translators and interpreters like Higbee don’t want to become employees. They enjoy the flexibility and the work-life balance they can maintain as freelancers.

“We are not a group that has been miscategorized,” Higbee said. “We really are given full control over our work, over how much we charge, how we do our job, everything.”

Ever since the law has been passed, Higbee noticed that he has been getting fewer replies from agencies he has requested work from. He and his wife discussed the possibility of leaving California if he can no longer afford to live in the state. “Much as I love California, I love my job more,” he said.

Pet sitters and pet care companies

Brandy Nightingale is the owner of Peaceful Pup, an Ojai-based pet care referral agency. She keeps a roster of qualified pet sitters for her 130 clients with a wide range of pets – from dog and cat to alpaca and emu. She also makes sure the clients will deliver the promised payment to the pet sitters.

Nightingale works with animal lovers who have some time to work flexibly but do not want to commit to a full-time job, such as retirees, students or parents with young children. But AB 5 will require them to become employees – or to get business licenses if they want to continue doing contract work. Referral agencies, which are businesses that connect individuals to services they need, are exempt if their service providers are free from agencies’ control and are business entities.

But for pet sitters, who don’t work frequently or regularly, business licenses may not be worth the cost. “Not everybody wants that kind of job. Not everybody wants to be an employee,” Nightingale said.

The situation is more dire for pet care companies that are not referral agencies, as they don’t qualify for the exemption. Unless they switch to becoming referral agencies, they will have to hire their independent contractors as employees. Nightingale said some of these pet care company owners are considering shutting down their businesses.

“I think it was good intended,” Nightingale said, regarding AB 5. “But don’t shut down these other small little businesses that are doing their best to do the right thing.”

The industry may also see more irresponsible pet sitters without pet care companies that vet the sitters. Nightingale heard of a case where a pet sitter, whom the pet owner found on social media, stole the owner’s two dogs. AB 5 “is opening the door for under-the-table work, which there is no accountability for,” Nightingale said.

Journalists, photojournalists and newspapers

AB 5 has a specific carveout for freelance journalists: The law exempts freelance journalists with 35 submissions or fewer per year. Media companies will only be allowed to hire freelancers with submissions below the limit as independent contractors.

“AB 5 has a big impact on us, as it does for many publications,” Deborah Petersen, the Editor-in-Chief of the San Francisco Media Company, said. The company, which owns the San Francisco Examiner, SF Weekly and SF Evergreen, hires a large pool of freelance journalists and columnists.

“Because we use freelancers, we’re able to have a wide variety of voices that we wouldn’t be able to have otherwise,” Petersen said. “We risk losing that.”

Petersen said the media company will have to limit the number of stories it can accept from freelancers. The company can’t afford to hire all the freelancers as staff journalists, nor do many of the freelancers want to become employees. The company’s freelancers include those who have other jobs or write for other publications – including a retiree who writes about wine and a taxi driver who writes about his cab driving experiences.

“Most of our columnists have other jobs,” Petersen said. “They just want to write a column and express their opinion and do some writing.”

AB 5 also sets a 35-submission cap to photojournalists and photographers. But some who have regular clients are worried that the law will limit the amount of work they can provide for each client.

Erik Castro, a Santa Rosa-based freelance photojournalist who works frequently with the Press Democrat, expects his income from the newspaper to be halved due to AB 5. Covering issues from local fairs to wildfires, immigration and homelessness, Castro estimates that he delivers around 70 submissions – twice the limit – to Press Democrat in a single year.

“I’ve always just stayed independent. And it’s worked out fairly well,” Castro said. He likes that freelancing allows him to do in-depth projects that take a long time, which he realized was difficult to pursue as a staff photojournalist.

But with the law, he will most likely be capped at providing 35 submissions for the Press Democrat. “It’d be great if there’s ways that AB 5 had some sort of opt out,” Castro said.

Castro is also concerned that the law may drive out Californian photojournalists who are valuable assets to local news outlets.

“We never just take pictures. We’re always trying to say something,” Castro said. “That’s a shame that there’s going to be photographers who just won’t be able to do that as often.”

Chad Surmick, the Director of Photography at Press Democrat who works with Castro, said that the law targets wrong people and puts “newspapers on the back foot.”

“Photojournalists specifically are becoming a more rare commodity,” Surmick said. He is already having a difficult time finding photographers who understand journalistic standards and ethics. With AB 5, he will have to search for more freelance photojournalists and spread the assignments so that they each provide 35 or fewer submissions.

Surmick said the Press Democrat will be sending out letters to freelancers that explain the law and how the newspaper will comply. The newspaper may also recommend its freelancers to get business licenses in order to qualify for an exemption given to business-to-business relationships.

“We’ll comply,” Surmick said. “I don’t think we have any other choice.”

Looking ahead to Jan. 1, 2020

Some companies began cutting ties with independent contractors in California. SB Nation, a sports outlet owned by Vox Media, announced on Dec. 16 that it will “move California’s team blogs from our established system with hundreds of contractors to a new one run by a team of new SB Nation employees.”

The announcement stated that the “shift is part of a business and staffing strategy that we have been exploring over the past two years, but one that is also necessary in light of California’s new independent contractor law.”

This change will affect more than 200 independent contractors who live in California or write for California teams. One of them is Rebecca Lawson, the Editor-in-Chief of Mavs Moneyball, one of SB Nation’s team blogs. She wrote in a blog post on the same day that she “will be forced to step down” by the end of March.

“SB Nation has chosen to do the easiest thing they can to comply with California law — not work with California-based independent contractors, or any contractors elsewhere writing for California-based teams. I don’t blame them at all,” Lawson wrote.

Rev.com, a startup that hires independent contractors to provide services such as translation and transcription, also discontinued working with California freelancers.

“California AB5 changes the rules around classification in a meaningful way and caused us to lose confidence that the State of California will respect Rev’s business relationship with Revvers, namely, that they are independent contractors,” Safeena Walji, Rev.com’s Public Relations Manager, said in an email statement.

Jason Chicola, the company’s CEO, notified all California-based independent contractors few weeks ago with an email. “This saddens the entire Rev.com team, but the new law leaves us with no reasonable alternative,” the email stated.

Ahead of the new year, various groups of freelancers began to challenge the law. On Dec. 17, the American Society of Journalists and Authors and the National Press Photographers Association filed a lawsuit claiming that the law unconstitutionally discriminates against freelance journalists.

The law is “full of unfair exemptions and carveouts that disfavor freelance journalists compared to other professions that engage in speech,” ASJA’s press release stated. “The rights of independent journalists are under attack.”

This lawsuit comes after California Trucking Association’s lawsuit on Nov. 12. The earlier lawsuit argued that the law limits truck owners’ ability to provide services and violates federal law and the Constitution.

A coalition of rideshare and delivery platform drivers also plan to introduce a ballot initiative for November 2020. The initiative, titled “Protect App-Based Drivers & Services Act,” proposes minimum earnings and benefits guarantee while allowing drivers to remain as independent contractors.

The scope of the impact will be clearer once the law goes into effect on Jan. 1. But in the meantime, companies and freelancers are scrambling to find out what they need to do in order to comply with the law – as well as ways to battle it.

“There’s nothing that can force me to be an employee,” Higbee said. “I’m going to fight it, with all the other freelancers out there who don’t want to be classified as a W-2 employee.”