Gov. Gavin Newsom has signed into law a bill that exempts more occupations from Assembly Bill 5, the controversial law that required most independent contractors to become employees of their clients.
The changes in Assembly Bill 2257 by San Diego Assemblymember Lorena Gonzalez, author of the original 2019 legislation, exempt many occupations in media, music and other industries from AB 5’s requirements.
“AB 2257 represents a comprehensive framework for employment law that makes a clear distinction between employer-employee relationships and professionals that run their own independent businesses,” Gonzalez said Friday. “This legislation was a product of robust dialogue over the last year with workers and businesses from every part of the state.”
Assembly Bill 5 included exemptions for many politically-connected occupations like real estate agents and doctors, but ensnared many others, drawing particular criticism from musicians, independent truck drivers, franchise business owners and freelance writers.
“This has been a year of challenges for musicians and other creatives, with AB 5 presenting yet another hurdle for many of those working in the music industry,” said Richard James Burgess, CEO of the American Association of Independent Music, which joined a coalition of industry groups in applauding passage of AB 2257.
The groups issued a statement saying the new law provides “relief to the vast majority of affected music professionals, including recording artists, musicians, composers, songwriters and vocalists.”
The original law was aggressively backed by labor unions, which hoped to organize hundreds of thousands of drivers at Uber and Lyft. The new bill doesn’t address those workers, but the rideshare companies are funding Proposition 22 to exempt businesses that use mobile apps to connect independent contractors with work opportunities.
The new legislation grew out of a 2018 California Supreme Court decision involving the delivery firm Dynamex that created a new test for whether a worker should be classified as an employee or independent contractor.
“AB 2257 strikes a balance and continues to provide protections for workers against misclassification that had previously gone unchecked for decades under the old rules,” said Gonzalez.
According to Gonzalez, AB 2257 significantly expands the types of business contracting relationships that would be governed by the previous standard, creating “multiple, reasonable pathways for businesses to comply with the law” while requiring “workers who are subject to undue control and direction” to be employees.
Gonzalez’ office posted a detailed online guide to the changes brought about by the new bill.