On Jan 1, California enacted a law called Assembly Bill 5 (aka AB-5) that is incredible broad and sweeping in regards to employment classification. This is a money-grab by the state to collect income tax and disability holdings from just about everyone. The new employment test is called the ABC test.
A) Is the person told how and when to do their job?
B) Is the person doing work relevant to the business?
C) Does the person have their own business that is not central to the hiring business?
This bill, if not successfully challenged, is expected to decimate the entertainment industry which works mostly on gigs. Say you are a musician or DJ and you want to play at a bar. That bar now has to make you a W-2 employee. Say you are a DJ and have a gig with a difficult load-in and want to hire a helper. That helper is now a W-2 employee. Say you are a band and your drummer (who has to be an employee) is sick for a gig. His replacement has to be a W-2 employee for the one gig.
The state carved out a few exceptions for special interests. The California Trucking Authority has received a temporary injunction claiming AB-5 violates federal laws that prohibit restrictions on interstate trade. The final ruling is pending. Uber and Lyft are thumbing their noses at the law and are prepared for a prolonged court battle. No one is stepping up for gigging musicians and DJs. Worse yet, other states are looking to emulate the law to fill their tax coffers as well.
California has never been very friendly to businesses but this law is crazy. It will drive Hollywood out of state if not successfully challenged. Hopefully we can recall the governor and those that voted for this insane bill. I am curious if anyone here on the left coast has felt the sting of this law yet.
A) Is the person told how and when to do their job?
B) Is the person doing work relevant to the business?
C) Does the person have their own business that is not central to the hiring business?
This bill, if not successfully challenged, is expected to decimate the entertainment industry which works mostly on gigs. Say you are a musician or DJ and you want to play at a bar. That bar now has to make you a W-2 employee. Say you are a DJ and have a gig with a difficult load-in and want to hire a helper. That helper is now a W-2 employee. Say you are a band and your drummer (who has to be an employee) is sick for a gig. His replacement has to be a W-2 employee for the one gig.
The state carved out a few exceptions for special interests. The California Trucking Authority has received a temporary injunction claiming AB-5 violates federal laws that prohibit restrictions on interstate trade. The final ruling is pending. Uber and Lyft are thumbing their noses at the law and are prepared for a prolonged court battle. No one is stepping up for gigging musicians and DJs. Worse yet, other states are looking to emulate the law to fill their tax coffers as well.
California has never been very friendly to businesses but this law is crazy. It will drive Hollywood out of state if not successfully challenged. Hopefully we can recall the governor and those that voted for this insane bill. I am curious if anyone here on the left coast has felt the sting of this law yet.