California’s Anti-Worker Law Shouldn’t be Imposed Nationwide

| February 25, 2021 | 0 Comments

By Patricia Bates

Independent contracting and freelancing work have been under assault in California for years because, among other things, it interferes with unionizing efforts. California passed a law in 2019 that significantly hurt worker freedom (Assembly Bill 5) and Congress could pass a similar law this year (PRO Act) that would devastate freelancers across the nation.

Let me provide some background on AB 5. Governor Newsom and legislative Democrats approved AB 5, which dealt a staggering blow to Californians who want to continue working as independent contractors. AB 5 enshrined into law a California Supreme Court decision (Dynamex) that created an entirely new test (ABC test) for determining whether an individual is an independent contractor or an employee.

The new test makes it very difficult, if not impossible, for many companies and workers to establish an independent contractor relationship. My Senate Republican colleagues and I strongly opposed AB 5 because of its negative effects on the economy and worker freedom. We introduced several amendments to help reduce AB 5’s worst effects, but Democrats rejected them on partisan votes.

AB 5 denies many Californians the opportunity to decide when to work, where to work, how to work, how long to work, and what to work on. More than 58% of California’s voters voiced their support for more worker freedom when they approved Proposition 22 last year, which exempts app-based rideshare and delivery services from AB 5.

The supporters of AB 5 argue that their law is necessary because of the Dynamex decision. This is not true. The Legislature could have implemented legislation introduced by Senate Republicans that intended to reverse the court decision and establish a broader, more flexible test that would encourage independent contracting and freelancing. This path would have allowed greater worker choice.

Instead, Governor Newsom and legislative Democrats chose to double down on enforcing AB 5, while also tinkering around the edges by giving 109 industries and professions exemptions from the law. Others were not so fortunate in receiving an exemption, including many health care professionals, owner/operator truck drivers, mental health professionals, franchisors/franchisees, television freelance journalists, tattoo artists, and pharmacists.

Moreover, even with AB 5 carve outs, confusing and ambiguous hiring rules have some businesses refusing to hire independent contractors or freelancers, leading to fewer jobs.

The Bureau of Labor Statistics (BLS) found that in 2018 a little more than 10% of workers engaged in independent work as their primary job. The Freelancers Union found that 35% of workers – 57 million Americans – contribute an excess of $1 trillion dollars to the economy each year.

It would be wrong to think freelancing and independent contracting are not desirable ways to earn a living. According to the 2018 BLS economic report, 79% of independent contractors prefer their work situation to traditional employment, and a 2017 survey revealed that most full-time workers who left their jobs made more money as a freelancer within a year.

Freelancers include artists and entrepreneurs pursuing their dreams, retired individuals on fixed incomes, single parents needing flexibility to juggle both family responsibilities and work, and college students who do gig work to afford classes and books. These workers choose this work situation because it works for them; they can be in control of their work-life balance. AB 5 limits their choices.

Therefore, California is a bad role model when it comes to worker freedom, yet Democrats in Washington, D.C. want to impose AB 5 nationwide by passing the PRO Act.

Among a slew of other economy- and opportunity-harming provisions, the PRO Act includes California’s ABC test, exposing the PRO Act as far more union-friendly than worker-friendly.

The PRO Act could pass this year and one can only imagine the damage it will cause to our national economy.

Lawmakers – state and federal – should be laser-focused on creating job opportunities for all workers, not passing laws like the PRO Act that eliminate them. We should be in the business of giving workers the freedom to choose as to how they want to make a living.

Patricia Bates (R-Laguna Niguel) represents the 36th Senate District in the California Legislature, which covers northern San Diego and southern Orange counties.

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