California Assembly Bill 5 (or AB5) is a state law passed in 2019 that makes it more difficult for people working for companies to do so as independent contractors. Instead, they must become employees and, while there are benefits to being an employee versus being an independent contractor like minimum wage laws, sick leave, and unemployment and workers’ compensation benefits, this makes companies less inclined to take on the burdens of employees over the short term.
This state of affairs has been and will be shrinking the number of job opportunities and will impact such freelance work like Uber and Lyft drivers, photographers, journalists, free-lance writers, and even shopping mall Santa Clauses. It was introduced by Assemblywoman Lorena Gonzalez, D-San Diego, and endorsed by Governor Gavin Newsom and signed into law by him in September of 2019. Of course, this is favored by unions already intent on overturning other similar “right to work” statues in other states.
One of the problems with the law — aside from destroying jobs — has been how it will be enforced. While some companies back away from contractual or gig relationships with individuals out of fear of legal and tax consequences, there are still others who still maintain clandestine relationships and are subject to enforcement. Sadly, Democrats in Sacramento have found that another $20 million will be needed for such enforcement burdening California’s blown-out budget.
Michelle Steel, Chairwoman of the Orange County Board of Supervisors and Republican candidate for CA-48, called on Governor Gavin Newsom to halt plans to spend this $20 million on enforcement of AB5 and put those funds toward recovery efforts from COVID-19.
“AB5 was driving jobs out of California before the pandemic. Now it’s even worse – setting aside $20 million for enforcement of this jobs-killing legislation when it could be used to aide our recovery effort makes zero sense,” Steel said, calling for the suspension of AB5.
“In Orange County we are doing everything in our power to help get people working again, and now the state wants to use taxpayer dollars to levy fines on these very same individuals and companies who are trying to claw their way out from the pandemic,” Steel added. “Sacramento should be trying to help our small businesses and independent contractors, not hold them down.”
Sadly, her opponent, incumbent Harley Rouda, has been not been as focused on the welfare of his Orange County constituents as Steel is. In fact, Rouda was active this past year in Washington, D.C. backing H.R. 2474 (Protecting the Right to Organize Act of 2019), a new lawn that is the federal to AB5. Authored by Rep. Bobby Scott (D-VA), H.R. 2474, would preempt state labor laws, overrule three Supreme Court decisions, and transform the National Labor Relations Board (NLRB) into a punitive one. The PRO Act would:
- Require workers to pay dues to a union;
- Change the definition of joint employment in order to ease union organizing;
- Amend the definition of employee to increase the pool of employees eligible for unionization;
- Impose government-mandated arbitration to dictate employment terms in first negotiations;
- Promote card-check organizing, a process that forces union representation on workers without a secret-ballot election.
In the final analysis, it’s a pity that Mr Rouda is so out of touch that he favors a bill mimicking AB5 in Congress because AB5 has generated a firestorm out here in California with millions feeling the effects of lost economic opportunities — particularly exacerbated by the COVID-19 situation. There’s even a proposition (Proposition 22) on the November ballot to exempt Uber and Lyft (so-called “app drivers”) from the law.
Clearly, Orange County — particularly CA-48 — needs someone with a little more foresight and a much better understanding of the needs of its constituents than Rouda seems to be offering.
Fountain Valley, CA