SACRAMENTO – California Governor Gavin Newsom signed legislation last Friday which provides exemptions for two dozen more professions from the controversial labor law AB5, which took effect this past January.
AB5 tightened the definition of “independent contractor” and requires employers doing business in the Golden State to minimize the amount of work that can be conducted by freelancers and contractors without being considered full-time employees and eligible for benefits.
Newsom signed AB 2257 which was authored by Assemblymember Lorena Gonzalez (D-San Diego) who had sponsored the bill and was lead sponsor of AB5.
The new measure, which took effect immediately, provides relief for workers in the state’s gig economy providing services such as freelance writers and still photographers, photojournalists and freelance editors and newspaper cartoonists, AB 2257 also exempts exempts various artists and musicians, along with some involved in the insurance and real estate industries.
A spokesperson for Gonzalez told the Los Angeles Blade that safeguards to make sure companies are not replacing current employees was provided for in the legislation. The spokesperson also noted that said Gonzalez said that AB2257 “strikes a balance and continues to provide protections for workers against misclassification that had previously gone unchecked for decades under the old rules.”
AB5 which was primarily aimed at ride-hailing companies Uber and Lyft, had inadvertently struck at other business sectors of the gig economy which opponents have labeled as permanently crippling the state’s economy by throttling traditional freelance employment that do not require a more traditional business model of employer-employee relationships. Numerous contractors told the Blade they were included in a legal definition that could end their livelihood.
The battle-lines were drawn a year ago when the California General Assembly passed AB5, which was drafted with the ride-sharing companies specifically targeted, that essentially implemented restrictions on how companies doing business in the state classified their workers. The law required that both Uber and Lyft reclassify their workforce of independent drivers as full employees, and further mandated that the companies provide healthcare and benefits to all the drivers in their system and pay additional taxes.
A lawsuit California v. Uber Technologies Inc. and Lyft Inc., CGC-20-584402, was launched by California Attorney General Xavier Becerra and city attorneys from Los Angeles, San Diego and San Francisco, to force Uber and Lyft, into compliance. San Francisco Superior Court Judge Ethan P. Schulman issued an injunction August 10 but put a stay in place allowing the companies a ten day period after which a state appeals court ruled the companies can keep their business models in place while challenging a judge’s order to comply with a state labor law.
There are new exemptions included also for musicians with single-engagement live performances, those persons involved with sound recordings or musical compositions, insurance inspectors, real estate appraisers and inspectors, manufactured housing salespersons, youth sports coaches, people engaged by an international exchange visitor program and competition judges. It also exempts those engaged in consulting services or animal services, along with landscape architects and professional foresters.