Biden Threatens Independent Contractors and Freelancers Nationwide

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Posted by John Kartch on Tuesday, July 28th, 2020, 2:10 PM PERMALINK

Biden’s Endorsement of AB5 and the PRO Act Threaten Independent Contractors and Freelancers Nationwide

The freedom to work as a freelancer or independent contractor provides flexibility for households and vibrancy to the American economy. But this freedom is under assault. A California law – Assembly Bill 5 (“AB5”) -- passed by Democrats in 2019 has ruined the livelihood of countless residents. The law took effect on Jan. 1, 2020.

And now Democrats led by Joe Biden want to impose the same freelancer-crushing policies on a national scale via legislation called the “PRO Act”

AB5 and the PRO Act trample on freelancers and independent contractors by attempting to force them into an employment relationship, against their wishes and needs.

Freelancers and independent contractors want to be their own boss. AB5 and the PRO Act dictate they must have a boss.

The results are tragic. Families and careers have been upended, and residents are fleeing to other states in order to pursue their dreams and pay their bills. A “President Biden” would impose AB5 policies nationwide.

Documentation of Biden’s endorsements of AB5 and the national “PRO Act” passed by House Democrats on Feb. 6, 2020. The PRO Act imposes the same harmful contractor/freelancer-destroying elements of AB5:

“I support #AB5 in California, which will give workers the dignity they deserve in the workplace. I agree with @transportworker that we can't let corporations undermine basic rights by adding these exemptions to ground-breaking legislation. https://www.sfchronicle.com/business/article/Uber-Lyft-DoorDash-campaign-for-ballot-15090479.php# - Joe Biden Tweet (3/7/2020)

“All workers deserve the right to bargain for good wages, benefits and working conditions – including gig workers. That is why I’m pleased the CA Legislature passed AB5. As president, I will enact a federal law to ensure gig workers get the full protections they deserve.” – Joe Biden Tweet (9/11/2019)

That’s why I look forward to signing the #PROAct as President. Congratulations to the House and labor movement for passing this landmark bill.” - Joe Biden Tweet (2/9/2020)

Examples of harm caused by AB5:

Elizabeth M. Adger: "AB5 is why I had to pack up my very ill husband with stage 4 cancer and autistic son and leave the state. There is no way I can take care of our family and work a “traditional” type job. I have always worked for myself and paid my taxes. I was terrified of becoming homeless."

Pattie Meyers: "AB5 is destroying the pet sitting business due to having to hire as employees! I’m sorry but there isn’t enough profit in pet sitting but with ICs (1099s) we can expand our biz by servicing multiple clients. Many pet sitters are either closing their business or trying to do it alone. This law has to be stopped!"

Hayk - “When the lawmakers make these laws, they don’t live our lives,” says Uber driver Hayk (who refused to give his last name). “They don’t live like we. They don’t struggle like we.  Imagine the hundreds of thousands of people who will stop doing Uber, where will they find another job? I have a big family in a two-bedroom creepy apartment. I pay $2,500. My wife got a full-time job. I have to pick my kids up or drop them off. I do that and come back to work, driving. What shift is going to let me do that other than this?

Haley Crim: "I lost the career and relationship I was building with a content writing company and making far above minimum wage with. Now I am trying to find any job as I only have about $2K in savings and can’t do what I love, which is writing. In addition, it will be difficult to find a job that is flexible enough for my symptoms and doctors appointments. Some days I wake up feeling like I was hit by a truck. The great thing about freelance and contract work is that I can choose how much work I take on, and choose not to work on the days that I don’t feel up to it, and still earn a living."

E Alan Hyman: "As a personal fitness trainer at a retirement community's gym facilities that was diagnosed with stage 3B colon cancer 10 years ago, 6 months of sever chemotherapy back in 2010-2011 has left me with physical issues that just don't allow me to work full time. Being an independent contractor gave me the ability to set a work schedule that my body could handle and make enough to support myself by only working a few hours a day. Now I have to change to an hourly employee which is forcing me to raise rates to accommodate all the withholding that is taken out, at the same time, restricting me to less then 30 hours a week so my employer doesn't have to pay full time benefits. There are a bunch of other ways were AB5 seems to adversely affect my job, but that would take too long to go into."

Anonymous:  "I run a Christmas Caroling company and will probably have to let about a third of my carolers go and make the rest employees. I will have about 50 employees that I pay one month of the year. And 2020 will probably be the last year I operate this business since I will have to raise rates at least 20% to pay those additional costs, and so I expect to book much fewer gigs than the 160 gigs I booked in 2019."

Alicia Dattner: "I just got my first notice that I won’t be getting paid for a big comedy gig I’m doing because of AB5, but of course I need to do the gig anyway if I want to be considered for a run at this venue. This could be just the start?  I do more theaters now than comedy clubs, but I imagine this will be extremely complicated for anyone wanting to do any one-off comedy gig - how would that even work? And for the clubs? One-offs and weekends are their whole biz! I also can’t even imagine a law now telling me that a company or person I work for one night is now the IP owner of the hour of jokes I just wrote. That’s beyond insane."

Anonymous: "There are many forensic RNs who work on a 1099 basis for private nursing companies and hospitals providing sexual assault forensic medical evidentiary examinations.  All of this work is at risk due to AB5. Patients who have been sexually assaulted will suffer long wait times and may receive substandard forensic medical exams if provided by untrained medical personnel in an emergency department. It is not feasible for many hospitals to have a forensic nurse on duty 24/7 so they contract with us to come in when needed. We are paid per exam, and receive a 1099. The forensic nurses are free to sign up for work around their other jobs or family commitments. We also have patients who were assaulted in skilled nursing and adult care group homes. We have worked very hard to increase the number of forensic nurses in California. I also do consulting and training on best practices for forensic nursing. Vicarious trauma among forensic nurses is a huge issue in this work. I’ve been told I’ll have to get a business license in order to keep working as a trainer and consultant, but I live in a rural area outside of city limits and my county does not provide or require business licenses for my type of work (I called and they said basically unless it involves hazardous waste or a few other very narrow industries, businesses licenses are not an option). The other alternative is to incorporate. I do not make enough money to incorporate."

Cindy Shea: "I am a bandleader of over two decades, two-time Grammy Award winner, and 11 time Grammy nominee. I have played trumpet since I was 8 years old and I am 45 years old now. I am a music producer, engineer, composer, arranger, music publishing owner, record label owner, and a corporate business owner of 20 years with Mariachi Divas Inc. where I have provided work for hundreds of successful musicians. I wear many hats and play many roles in order to make the ends meet as a SINGLE mother of 2 sons with NO child support help!  Thanks to this not only myself but hundreds of hard working TAX paying musicians will now be forced to go back underground for cash gigs, and leave me here to figure out and question why I ever followed the law and created a small business to create the American dream and create jobs for so many others. Two decades of my business destroyed because I have no one who wants to work for me now. Thank you for destroying successful Women’s and Men’s dreams across the globe Ms. Lorena. Maybe you can explain to my children why everything in their lives is about to change ?!?!!?"

Gina Peck-Sobolewski:  "I’ve been in contact with our local reps and advocacy groups for mental health. I’m a MFT who can no longer contract therapists or work as a contracted therapist. A large part of the behavioral healthcare industry is built upon the contractor relationship. We, in essence, contract with commercial insurance providers. Again, a major part of AB5 that was not thought through and it is affecting the mental health accessibility of millions of Californians.

Celesta Rannisi: "What hospital or company is going to hire me to do home births?! I am a freelance independent home-birth midwife! Licensed by the state of CA. And registered with the North American Registry of Midwives! Lorena you're killing me by taking away my livelihood! I have been serving women 34 years! There is no transitioning available for me at my age of 62."

Marianthe Bezzerides; "I have a music lesson company in Los Angeles that I single handedly built and managed, by myself, for the past 6 years. I have been contracted with many music teachers over the years who have enjoyed the flexibility in their schedule while they pursue composing, performing and other teaching gigs. The pay rate is three times the minimum wage in California and we have fantastic families that we work with. AB5 threatens my ability to stay in business unless I cut teacher’s pay and take away the flexibility that they have come to enjoy, or raise the rates on all of the families. We’ll undoubtedly lose business from parents who are striving to provide quality music lessons for their kids, who won’t be able to afford the new tuition increase. For me personally, this comes at a time in my life when I’m not in the position to go get a job if my business goes under as I have a new 4 month old to take care of. There is going to be a huge ripple effect across the economy in California because so many small businesses will hand to shut down, cut contractor pay or raise rates. My guess is that a lot of services will just disappear."

Megan Kellie: "I am a nurse practitioner. The result of AB5 is closing medical offices and leaving a huge gap in medical care. Many doctors offices in rural health rely on nurse practitioners to keep their doors open as it is a small pool of people to choose from for full time status. This is many doctors offices in general. Small, private practices. It hurts them. Many offices are closing.It hurts me substantially as a provider. Being an independent contractor has allowed me to have a flexible schedule allowing me to spend  more time with my children. I do not live near family that can help with child care. This will be a huge impact on my family and causing more expenses to us. Furthermore, now that the larger companies are aware of this law, they have all squashed our pay and took away our ability to negotiate salary. Nurse practitioners are healthcare professionals and should be treated as such."

Elizabeth Tobias: "I’m an Artist in Residence, Teaching Artist and Expressive Arts Therapist. I facilitate therapeutic art to underserved populations. I’m a working mom and must set my own schedule so I can be available for my daughter and all of her activities. I just lost a summer teaching job that I was really counting on because of AB5 as they are no longer able to hire independent artists. I called Lorena Gonzales office to share my story and they hung up on me as I was speaking.I feel overwhelmed and powerless. The political climate has been stressful enough. AB5 is harming me emotionally and financially. I want my freedom back!"

Cori George: "I have a craft blog. I have several different "virtual assistants" who do all sorts of blogging tasks for me (writing, SEO research, admin, social media, etc.). Basically all the things that are affected by the "B" part of this law. Two of my VAs are in California (so am I). One of my VAs has more than a dozen bloggers that she works for. Which means she's basically screwed (like so many people in here). These bloggers aren't going to hire her as a W2 employee. She picked up this work so that she could stay at home and be with her daughter while picking up jobs on the side to help support her family. She doesn't want to be an employee. She wants the flexibility to work when she can and take time off if she needs. Goodbye side hustle. On my end, I don't want to hire an employee. My blog can be seasonal—I need more help during busy seasons and less during slow seasons. I change the types of work I do month to month, depending on the whims of Google and Pinterest and their algorithms. And because bloggers do, well, basically everything, the "B" requirement makes it impossible to hire any contract worker except maybe a CPA. You can add bloggers and virtual assistants to the list of people unduly affected by this law."

Karen Jackson-Fox: "I work with East Bay Children's Theater in Oakland. We are a group that does a tour once a year to title one schools in Oakland and Richmond. We have been around since 1933. We are a non-profit that relies on donations, volunteers, and the tickets we sell for the few public performances we have. The board is stressing about AB5, we don't have a lot of extra cash. Next year we may cancel for the first time in decades. I'm hoping for a miracle, as this is the only opportunity most of these kids have to experience live theater. I love the flexibility of freelance work and working for many companies that bring theater to kids."

Lynn, tweeted by Kevin Kiley: "#AB5stories, Lynn: "I'm a transcriptionist. I work from home and love it. I'm not able to work outside the home now and wouldn't want to. I choose what work I want and when to work. After #AB5, the companies I work with had to cut off their CA workers. We lost our livelihood."

Marsha, tweeted by Kevin Kiley: "#AB5stories, Marsha: "I lost my job of 12 years as a medical transcriptionist because of #AB5. Many in this profession value the flexibility in hours and working from home more than employee status. Now I have no money at all.""

Susan, tweeted by Kevin Kiley: "#AB5stories, Susan: "I've worked as a court reporter since 1992. #AB5 has upended my career. I WANT to be independent. I can work with up to 30 agencies a year. Some I only work with once. I want to set my own hours, what depositions I choose to report, where I choose to work.""

Marina, tweeted by Kevin Kiley: "#AB5stories, Marina: "I'm a certified court interpreter. I've been very happily freelancing for 15 years. I can choose which agencies to work with, and work as much or as little as I want to spend time with my 3-year-old. #AB5 is destroying my wonderful work/life combo.""

Marion, tweeted by Kevin Kiley: "#AB5stories, Marion: "I'm a freelance translator and have clients who suspended all working relationships with California translators because of #AB5. Add COVID-19 and my income is down nearly 60% from last year. Repealing AB5 would take at least one of these strains away.""

Courtney Johnson: "I have been a freelance (read: independent contractor) for after school theatre programs and a theatrical technical designer for well over a decade. AB5 is endangering most of those programs to close their doors. These are tiny non-profit arts organizations who give children somewhere safe to go after school, let them express themselves, give them confidence to find and use their voices. I am against shutting down after school programs that give children a safe place to go, and when these kids are left to the streets. I have negotiated my own contracts for years, and prefer being able to pick and choose where and when I contract. Out of the dozens of groups I've contracted with over my career, only two have been eligible to be union theatres, and it wasn't worth it to join since they don't guarantee you work, they just take your dues and I didn't have the hours logged to join anyhow. Read: I was not eligible to join a union. The theatres/theatre groups I have contracted with are not large enough to have union contracts. There are no unions for after school arts programs --and there don't need to be since most contracts only last a few days a year."

Tessa Cisneros: "I am a movement instructor for studio and afterschool programs, and refuse to become an employee so they are replacing me. My heart breaks."

Valerie Talcott Fausone: "I work with large rescues and small shelters and they can’t hire me. At a time when Governor Newsom made the brave and correct call to create a No Kill California, I was all set to consult on this, given I have seven years of safe, no-kill public sheltering experience. Now I cannot consult with shelters looking to improve their results. IRONY! I have to move out of California and work for other no-kill shelters in Austin, Texas, as one example. As a third-generation Californian, I think this is unreasonable and cruel."

Liam Murphy: "I'm a freelance architectural designer (28 years old). I have a professional architecture degree from a top 10 program. Licensing requirements (to be an Architect) in the states include hours logged on the job, as well as passing 6 national exams, and 1 additional exam required by California. So I am in this intermediate period that all architects go through, where they are professionals (out of school, working full time), but not yet fully licensed. Two years ago I left my salaried desk job at a San Francisco firm. The primary reason was to focus full time on my exams, and I finished the national exams within the year. The other reason was to take on an addition and remodel project for my parents. We are redesigning a family home so my parents can retire and remain in their home as they get older. Managing this project is somewhere between a part-time and full-time job in terms of time commitment. I would not be able to work an additional full time and still run this project by myself. After about a year (beginning of 2019), my former employer contacted me and asked if I would be interested in freelance work. We met and negotiated terms. We mutually agreed on an hourly contract. I was bringing in far more money per hour than when I left that firm 1 year earlier. It was a good deal for me and they clearly needed someone they could trust to get work done fast without having to be trained. Mutually beneficial. As I look to complete my last California exam and become a licensed architect, I hope at some point to start my own firm and practice as an architect. Everything I was doing was in advancement of that goal. The money I was able to bring in with the freelance work was enough to support myself, while giving back to my parents with rewarding personal work. Not to mention the improvements in my mental health due to the lifestyle shift of not working long hours in an office. Now, due to AB5, my contract with that architecture firm is on "indefinite hiatus" until they feel comfortable that they can work with me legally. In addition to my existing workload, I now need to do extensive unpaid research into the law, whether I should become a corporation, how things change when I transition from an unlicensed designer to an architect, etc. Meanwhile money is not coming in, and I am back to burning savings (which for the time being is WORTH IT since I love what I am doing). I am not stupid, or a freeloader, or a tax cheat, and it's frustrating that the state would treat me as one, when I all I want to do is become the best version of myself I can be so that I can be of some service to my community."

Kevin Matty: "I have lost over 50% of my 2018 income since the implementation of AB5 compared to my 2019 income. Now my clients that I've had for years don't want to give me too much work because they'd have to hire me as an employee and cannot afford it."

Chelsea Hardaway: "Billion dollar companies that used to pay anywhere from $50,000-$100,000 for rebranding, positioning exercises, brand collateral, marketing pieces, blog posts, infographics, content marketing or marketing strategy are now afraid to hire freelancers and will only work with big agencies.  Most of the best creatives want to be independent and come together in fluid teams as it fits various projects — without having to charge high agency fees for overhead.  These people will lose their livelihood. I already have a business license and $1M business insurance. Am now going to have to hire attorneys and accountants and set up a corporation that pays payroll and holds worker’s compensation insurance for a desk job I do from home (and I already carry the aforementioned biz insurance). It’s an unnecessary burden for a sole proprietor and will make my costs of being in business much higher ... in order to do business with billion dollar companies and make them feel safe?  Unfair burden on the sole proprietor. Additionally, most tech companies (all companies!) in the Bay Area have a voracious need for content they can email and put on the internet to attract new clients. They don’t have the resources or expertise in house so they outsource a lot of that to freelancers."

Lili VonSchtupp:  "I am a 54-year-old disabled female burlesque dancer, emcee, magician, and producer. AB5 has cut me off from income as a performer and as a producer. With 8 minutes work as a dancer on stage, it's impossible to characterize me as an employee. I work for some companies one a year. I create my own acts, should be allowed to own the intellectual property of my art, and write off my costumes and business expenses. As a producer, I can't hire anyone either as they are all like me. You are killing the arts. AB5 has devastated my coming back to work after being diagnosed with a degenerative illness. I can't be hired at 40 hour a week job as I can not have the flexibility to deal with my illness or receive an hourly pay rate to survive part time. I also can't drive. I am the textbook small business entrepreneur. AB5 has effectively made it impossible for me to work and support myself with dignity. I ran LA's number one weekly burlesque show for 12 years and now I sit home writing my elected representatives begging for the right to work."

Pegi Scarlett: "I am a cancer registrar and own my own company. I contract with hospitals to provide services so they comply with the California Health and Safety code 103885 (mandatory reporting of all cancer cases). My company and all the ICs are at risk and so is the cancer reporting system, as many hospitals contract out this work.  REPEAL AB5!"

Dana Buchanan: "We do all sizes of events, mostly in the 50 to 200 guest range. Every now and then we’ll have a 1,000-person event. I bring in independent contractors to work one day and this law says I have to bring them into my payroll. For ONE EVENT, I would have to bring on 100 people into payroll. Insane."

Dan Fung: "Doctors of Chiropractic are not exempt so basically they discriminated within the healthcare system. I just lost a contract where I would ironically treat injured workers and help them get back to work."

Monica Fontes: "I am 61 years old senior female and cancer survivor (maybe still patient). AB5 destroyed my life, taking my 8years over the phone interpreter job. Who will hire a sick senior like me? I was making a good money, taking my breaks when I feel like. During my chemotherapy this job was my salvation against depression, made me feel useful and when I was interpreting I not even had time to think about any bad things happening in my life. Helping people in hospitals, pharmacies, hotels, rental companies, immigration agencies and much more. Since January I live depression, somedays I don't have strength to get up in the morning, I just crawl and cry, bc for 8 years I been waking up to log in and start to work. Sometimes I wish I could die. My name is Monica and this is my #AB5 story."

Mary Bronson: "Here’s a story. I lost my client on 2/12/20 because of AB 5. I am a legal transcriptionist working from home. I have worked all my life. I am 69 years old and due to health problems I can no longer work outside of my home. Speakwrite gave me the chance to continue to work by allowing me to work my hours at home.  It also supplemented my social security and paid for ever increasing costs of insulin and other medical bills not covered by Medicare. I am devastated emotionally and financially over the inability to continue to work and support the economy."

Michelle Risling: "I am a temporary, interim choir director at a church while they look for a new permanent director. I am not at all interested in being permanent and I like the flexibility of being a conductor by the “gig.” I’m only there for 6ish weeks. I still have to go through the whole song and dance of payroll to become an actual employee, costing the church an additional approximately 40% to hire me. I’m fortunate they’re willing to do it, even though I don’t want it and neither do they. This law is SO dumb."

Christina Alexopoulos Smith: "I am a paid singer at a church and it is my only source of income currently. I am a freelance singer so basically I will not be hired for any gigs going forward. So much for bringing arts to the community and enriching people’s lives."

Rachel Dorsey: "I’m a commercial producer and I bring on self-employed specialists for every job I produce. We work with extremely tight (read: no) margins. Every single one of us is a small business owner. We’ve been able to make it because we support each other by bringing on the right expert for the right project in a growing community of self-employed creatives, artists and technicians. None of us want to be employed. We’ve worked so hard for so long to “make it” as a self employed person and finally - now that we are - we’re being told that we actually aren’t business owners and we actually can’t have the American dream of self employment. Our customers aren’t going to be willing to pay 30% more, and the experts we bring in shouldn’t have to take 30% less. At a time when creative services are finally having their moment, we’re being snuffed out."

Sylvia Amorino Gonzalez: "I run a small nonprofit opera company and am scrambling to comply with this terribly written law after only hearing about it 2 weeks ago...I am receiving emails daily, it seems, of companies in the SF Bay Area going dark until they figure AB5 out, or cancelling their season because they don't have the money to comply or can't set it up in time, or closing altogether. I am sad and sick as I watch the arts crumble around me.. Some of these companies have been in business for as long as 50 years!!!! All give jobs to many musicians, singers, actors, dancers, designers, staff, etc.  I am in shock. I have been in the business for over 40 years and have not seen anything as tragic as this EVER!"

Cat Kenison Erickson: "I am a Freelance Costume Designer in the Inland Empire and work with local community theaters. On average, I design 4-5 shows per year. While not my primary job, it does make up 10% of my annual income and was vital in maintaining my family when my husband was laid off in 2013. I am required to fill out a W-9 for each theater company and pay my taxes accordingly. AB5 has already cost me one job opportunity and may cost me the rest. Much of the work I do is for Children’s Theater and typically I work with 50-80 children on each show. Many of these children are involved in theater for the first time and these experiences enrich their lives for a lifetime. Art is vital to a vibrant community and so is my part in creating that art. I have my MFA in Design from USC and am trained to be a professional Theatrical Designer. I choose to work in community theater and share my training and talents with these kids. If these Theater Companies are forced to close because of AB5, the access to the Arts for these children is in jeopardy. More than my paycheck is at stake here. AB5 would reduce the opportunities for communities in the Inland Empire to experience live theatre. My work as a Freelance Designer does not pass the “ABC test”, While I negotiate my fee and can negotiate my time as well, as a trained professional, I know what is needed and expected of me as a designer and there are dates and times I must attend. I am heartsick over the possible loss of these opportunities, not just for me but the very real possibility that a mall, community based theater companies, dance companies, and music groups may be forced to shut down. Many young designers cut their teeth in community theater and summer programs before going on to become professional theatrical Designers. Limiting their opportunities to hone and improve their craft ultimately harms the industry at large. AB5 is like cutting off your hand because you have a bad paper cut; it does more harm than good."

Larissa Lam Chiu: "I’m a composer and musician and many in our industry have major concerns. I spoke to a major film composer friend of mine today who is now reluctant to hire independent orchestrators and musicians in CA for his projects because of AB5. He plans to turn to people outside CA or even outside US. Also heard about an arranger/musician who regularly contracted with a theater company for all their productions for over a decade in L.A. they have officially cut ties with him because of AB5 and they did not want to risk failure of complying. it was not practical to bring him on as an employee since their productions are seasonal."

Anonymous: "I’m a sole member LLC in CA working as an independent composer arranger. and producer. I’ve had my business 25 years. I’m also the mom of a 7 yr old son, I’m the primary caregiver during the week. I cannot get a full-time salaried job with my responsibilities to my son. I have a client whose mom is an attorney. I’ve been working with them 5 years and they said they’re unable to use me until this mess is cleaned up for the music industry even though I’m an LLC. And for every job I lose it represents 2-30 other jobs lost for players, singers, engineers. Income lost for commercial recording studios. I’m forced to go dark for a while and try to live on my passive income (50-60% of my total income) because I can’t figure out how to comply with the law and hire the players. I’ve spoken with two lawyers and two accountants over the last two weeks and they all have different interpretations of what AB5 means.  If the professionals who are supposed to be experts in interpreting the law can’t even definitively understand it, how on earth can a small business owner understand it let alone comply with it?  My only recourse is not to work on anything that requires hiring anyone for a month and hope and pray this mess gets sorted out.  This is like living in a surreal scary novel.  This law is anti-small business.  The huge corporations in the music industry can afford to proceed with business as usual.  They have powerful legal departments who can and will fight this for as long as it takes in court if they get slapped.  I can not afford this risk."

Angie Paterson: "General Consultants are impacted. I tested data technology, machine learning, evaluated social media, and ad content. I was a subcontractor to a company hq’d in Australia who contracted with other very large companies to provide project support. I was a general consultant working on all sorts of unique projects. It allowed me flexibility volunteer in my community and my children’s school, support our other businesses and provide additional income while also being able to care for my school aged son. All CA contracts were cancelled for all projects and those contracts were just taken to individuals in other states. Exemptions won’t cut it. My company will not rewrite their their contracts for exemptions as frankly, they don’t have to because they can just blackball CA based ICs and not deal with the risk and ambiguity of this crap law. So even though I am a sole proprietor by definition and even if I were to get an LLC or even S Corp, the company won’t touch me. Again, I have no idea how many are out there like me but we’re here too! It's about any type of project you can imagine."

Bernard Barker: "My wife is sole proprietor of a pet-sitting business whereby she visits clients' homes to take care of their pets when they are absent. She also stays overnight as an additional service to care for the pets in their home.  She works 7 days per week, sometimes up to 14 hours per day.  When she has excess business, or when we go on vacation, she offers business to two other pet-sitting companies, who cover her business for a short duration.  These people receive a 1099 and are considered independent contractors. She has built this business over the last 4 years with blood, sweat and tears.  At 59 years of age, she is building her retirement nest egg.  The people she uses earn the equivalent of $40 per hour and pay taxes. She has no choice but to reduce the size of her business and eliminate outsourcing of excess business which runs at about $50K per year.  The State will lose this income as will our supporting partners. She is one of thousands of pet sitters in the state all with similar stories, making a living the hard way.  Her competition are amongst others, Wag and Rover, who will dodge AB5 by being a referral business."

Freddy Perez - "Like many of the other half-million Californians  driving Uber and Lyft, Freddy Perez liked earning some extra cash as a rideshare driver to supplement his main income. He worked about 30 hours a week subcontracting as a fenestration testing technician, so on his off days, he would pick up Uber or Lyft passengers in his 2012 Honda Insight, earning about $18 to $20 an hour.

Perez didn’t need Uber or Lyft to survive. He made about $2,500 a week in his subcontracting job, which was enough to pay his $1,850 rent in a Los Angeles suburb and live comfortably. So when he first caught wind of California’s newly enacted Assembly Bill 5 (AB 5)—or the so-called “gig worker bill” that targets companies that hire independent contractors—he paid little attention to it, assuming it only applied to gig workers. Then two weeks before Christmas, he received a rude shock: His contractors told him they could no longer subcontract him because of AB 5...

For Perez, AB 5 basically obliterated his occupation. One of Perez’s contractors, an owner of a fenestration testing lab in San Bernardino County, offered to hire Perez as an employee at $20 an hour. It was a goodwill offer—the contractor admitted he didn’t have much for Perez to do full time. Taking that job would have meant swallowing a significant pay cut and making a daily 100-mile commute in LA traffic to do odd jobs such as sweeping the floors or filing reports. “That made no sense to me,” Perez told me: “That’s 10 hours of driving a week to basically do nothing. Literally, I could drive Uber and make that much.”

So that’s what he did. In an ironic twist of unintended consequences, Perez is now driving full time for Uber and Lyft because that’s what he could do at immediate notice. Instead of earning $2,500 a week, he’s now making about $600 a week. Perez and his girlfriend decided California is no longer a viable place to live. They bought a house in Florida and are selling whatever they can so they can move in April. Perez hasn’t found a job yet in Florida, and until he does he intends to drive Uber and Lyft."

Brian Lee - "Brian Lee is a driver from Pasadena who drives between 50-60 hours a week. According to the new law, the rideshare companies that he would become an employee of would have to pay him overtime if he continued that practice, but odds are unless he received special permission, the app would not allow him to receive trip requests after 40 hours in a week. He would probably have to work for a second rideshare company if he wanted to drive those extra 20 hours.

“Every driver knows if you’re not driving over 50 hours a week, you cannot make any money,” Lee, who has been a driver for over two years, says with a laugh.

That too might change if the companies slash the number of available drivers on their fleet. Drivers like those waiting for hours for a ride at LAX would presumably be constantly busy since demand will remain the same but the supply of cars would diminish."

Joel Turk - "Joel Turk, a soft-spoken chef from Arcadia who looks like a younger, modern-day Smokey Robinson also says he would pass on becoming an employee with the rideshare companies. Turk owns various larger vehicles which he uses for his catering company and for delivering small items for UPS and driving for Uber and Lyft on the XL platforms.

“I’ve got four kids. This is the first year for me where they’re in four different schools,” he says. “So there’s drop-off, pick-up, in the morning, the afternoon, my cooking, my food prep, all of that. My driving is very specific when I need to go, but it’s great when it lightens up.” And he can fill in his downtime being a rideshare driver."

 

Photo Credit: Phil Roeder