By now, you’ve likely heard about the independent contractor bills in several states that could derail how freelance writers do business in 2020. In California, for instance, where AB 5 took effect on Jan. 1, freelancers are already being blacklisted from certain publications, losing weekly columns and seeing reduced contract terms. Journalists in New Jersey (S4204/A5936) and New York (S6699A/A8721A) are pushing against similar legislation in their own states.
The details shift quickly, so here’s the latest (and where to connect with others) in 2020:
The legislation in New Jersey is halted — for now.
As of Jan. 8, New Jersey legislators won’t vote on S4204 before the session ends on Tuesday, state Senate President Stephen Sweeney told reporters. Sweeney, a Democrat who sponsored the proposed law, has stood by the idea that New Jersey’s proposal “wasn’t the same” as California’s restrictive law. After legislators heard four hours of testimony, however, he said they “want to make it right.”
“We want to be fair to legitimate independent workers,” he told NJ Advance Media on Wednesday. “But for the businesses that are gaming the system, we want to correct that.”
The measure, which was seen as a “sure thing” among some unions and businessmen in Trenton, will be taken up during the next session.
Two national groups are suing, but the process will take time.
On Dec. 17, the American Society of Journalists and Authors and the National Press Photographers Association filed a lawsuit in California to challenge AB 5, which restricts writers and photographers to 35 pieces of content per year per client or publication. Three days later, they asked for a temporary injunction on the law that would take effect on Jan. 1 and begin to affect freelancers immediately.
On Jan. 3, however, Federal District Judge Philip S. Gutierrez denied the request based on the timing of the motion. A full hearing for the injunction is set for March 9. (As a side note: A federal judge in San Diego did issue a temporary restraining order that exempted truck drivers from the law the day before it took effect. A hearing for a permanent injunction for truck drivers is set for Jan. 13.)
“Our rights as freelancers to work as we choose — the rights that give us the freedom we cherish — are under attack as never before,” Milt Toby wrote in an ASJA Confidential post published on Jan. 7. “A restrictive new law in California and similar legislation being considered in other states will restructure the relationships we have with our clients and change the very nature of how we work.”
Freelancers are coming together to speak up.
Last year, more than a dozen states introduced bills related to worker classification, and among those, legislation passed in California, Delaware, Illinois and Nevada, Josh Cunningham of the National Conference of State Legislatures told USA Today.
As legislation springs up in other states this year, expect freelance reporters to become even louder. The New Jersey legislation slowed down, in large part, because of freelancers who called and wrote legislators earlier this week. Although several detailed stories appeared in national outlets, this final “call your legislators” campaign seemed to tip the scales, columnist Jeff Edelstein wrote in The Trentonian on Thursday.
“From writers to truckers, from strippers to plumbers, from everyone who gets to everyone else who gives a 1099, it was those calls to the offices of their statewide elected officials that put the kibosh — for now — on this legislation,” he said.
The New Jersey group, for instance, created a group called Fight for Freelancers (here’s their Twitter and Facebook) to provide more information about the bills in their state, speak directly to NJ lawmakers and tell stories about freelancers in different fields (writing, pharmacy, design, food) who would be affected by the legislation. They’re using the hashtag #fightforfreelancers across social media. It now has more than 1,000 members.
Their sister group, Fight for Freelancers NY (and Twitter and Facebook), uses the same hashtag and tracks the progress in New York. With more than 700 independent contractors, the group includes writers, musicians, realtors, truckers, financiers, teachers, photographers and more.
“Many people still haven’t heard of the bill, but as the Senate goes back into session, we expect this to gain traction,” said Kristin Bundy, a health care and science journalist who is part of the New York group.
“We are working mothers, people with disabilities, small business owners, and people who need or prefer freedom,” she said. “We are action- and information-oriented.”
In 2020, the strength will come in numbers. Turn to the pages mentioned above, as well as the California Freelance Writers United Facebook page, to ask questions and get involved.
Check here for AHCJ’s previous coverage of AB 5 and the lawsuit by ASJA and NPPA.
Small clarification about the ASJA/NPPA lawsuit in AB5. The judge’s decision on Jan. 3 denied an application for a temporary restraining order (TRO). The hearing in March concerns the plaintiffs’ request for a preliminary injunction. A preliminary injunction would be a huge victory because it would bar enforcement of AB5 until the case is adjudicated, which could take a long time.
The ultimate goal of the lawsuit is a permanent injunction against enforcement of two aspects of AB5: The 35-submission cap on freelance journalists (including photographers), and what amounts to a prohibition on video submissions as part of paid assignments.
As the story indicates, the judge’s ruling was purely related to timing issues. In order to get a TRO, you have to demonstrate that the situation is an emergency. He said the plaintiffs waited too long after passage of AB5 to file the lawsuit and to ask for the TRO.
He did not address the merits of the case. However, the filings from the plaintiffs and state Attorney General indicate at least some of the legal issues that are likely to come up. You can view the documents through the Federal court PACER system (cost is 10 cents/page). You need to know the court (California Central District) and case # (2:19-cv-10645-PSG-KS).
The lawsuit claims that AB5 violates the 1st and 14th amendments by favoring some “speaking professions” over others. Marketing writers, grant writers, graphic designers, and fine artists have full exemptions under AB5, so they can continue as independent contractors under the old rules. But journalists and photographers are limited to 35 annual submissions per client, and they can’t shoot video as part of their paid journalism assignments.
I’m not a lawyer, but the crux of the 1st amendment argument appears to be whether protections apply strictly to ideas or viewpoints expressed in speech (the state’s position), or whether they also apply to the “function or purpose” of speech (the plaintiffs’ argument). One case cited by the plaintiffs is a 2015 U.S. Supreme decision in Reed v. Town of Gilbert, which involved a sign ordinance in Gilbert, AZ. It was a unanimous decision, but the justices differed on how broadly the decision should apply to other cases.
Another point I’d like to make about AB5. It was crafted to prevent companies from exploiting workers by misclassifying them as contractors. The highest-profile targets were gig economy companies like Uber and Lyft. But it was written so broadly that it also applies to hundreds of other professions, and it’s clear that the author and supporters had limited knowledge of those professions and how they would be affected. The groups that did influence the legislation were those that had a big lobbying presence in Sacramento, especially organized labor.
Journalists and photographers were able to make legal claims due to unique aspects of those professions. Interstate truckers have also filed a lawsuit based on issues unique to them. But the law affects other professions in different ways, not all of them amenable to legal challenges. Their only recourse is getting the legislature to amend the law. It’s a cautionary tale for folks in other states, because it’s much easier to deal with legislation before it’s enacted.
One area where AB5 is having a big negative impact is performing arts. The executive director of San Jose Jazz wrote an excellent (but heartbreaking) commentary in CalMatters about this impact. A small volunteer-run opera company in Alameda, CA, just announced that it is postponing a March production due to AB5. I’m sure there will be others.
https://calmatters.org/commentary/gig-economy-3/
AB5–lets hear it for ignorant politicians and unions who don’t like the idea of independent workers. Let’s destroy lives and livelihoods!
It seems that a resonable accommodation for freelancers would be to classify them as such if they meet the IRS criteria for a 1099 worker rather than a W-2 employee, eg, they have multiple clients, set their own schedules, use their own equipment, etc. But try telling that to a legislator. However, I assume some of them felt that it would be good to protect gig workers from exploitation by Uber, Lyft, and other similar organizations, which is a laudable goal. But then the law of unintended consequences creeps in, as we see in the case of AB5. Would it help the independent contractors to become LLC’s, S-corps, or the like? It would be added paper work and some rather small expense, but it may be worth it if it would get around the problems created by the new laws.
You raise an interesting point. The law includes a so-called business-to-business exemption with 12 requirements. It allows for sole proprietorships and LLCs. However, the author of the bill has made conflicting statements about whether it applies to journalists.
On Oct. 11, she told a group of freelance writers that she wasn’t optimistic that we could use the exemption. Then clients started dropping CA freelancers or cutting back their work. On Dec 19, she posted a question on Twitter, asking if it would help if the law were amended to clarify that the B2B exemption works for journalists. Later, in multiple TV interviews, she said flat-out that it does apply to journalists. The law hasn’t changed, but with each passing day, the negative impact of the law becomes clearer and clearer, and she’s been getting a lot of blowback.
One problem is that AB5 is open to interpretation, and that includes the B2B exemption. Lawyers are advising publishers to reduce liability by avoiding CA freelancers or by taking extreme measures to comply. Forbes is requiring its CA freelancers to become LLCs even though it isn’t explictly required. I believe Variety is doing this as well. In CA, it costs $800/year to be an LLC (though the governor’s proposed 2020 budget will waive that for one year).
A Forbes contributor in L.A. who is confined to a wheelchair went on GoFundMe to raise money for an LLC: https://www.gofundme.com/f/help-keep-me-employed
Given all the blowback, the author of the bill has been pointing to the B2B exemption as one of her primary defenses. She keeps saying that legitimate sole proprietors aren’t affected. The California Chamber of Commerce posted an article explaining why the exemption isn’t working for people. https://capitolinsider.calchamber.com/2020/01/oh-what-a-relief-it-isnt-ab-5-and-the-b2b-exemption/
You mentioned the IRS criteria. This bill is part of a larger push by organized labor to maximize the number of people who have W2s and minimize the number of people who are paid with 1099s. They point to all the protections you get with a W2, but it’s also true that to join a union with full bargaining powers, you have to be a W2 employee.
One of the freelance writers who tried to lobby the bill’s author last year said this: “She told us that the idea of someone working even an hour a week, every week, for an employer on a freelance basis makes her ‘sick.'”