LOS ANGELES — Many gig workers hope AB 5 gives them the workplace benefits they have been fighting for—minimum wage, workers comp, and unemployment insurance.  

While Governor Gavin Newsom signed AB 5 into law in September, it took effect January 1.  Assemblywoman Lorena Gonzalez, who represents San Diego, wrote the bill.

RELATED | AB 5 Impacting Freelancers Across Variety of Different Industries

"We lose upwards of $8 billion a year because of lost wages, lost taxes, because of the expenditures we have to make as a state when businesses mis-classify their workers," Gonzalez said.

There are basically two kinds of workers; employees, and independent contractors — also known as freelancers. 

Before April 2018, workers generally were considered freelancers if the company did not have control over them, involving things like scheduling or how they performed the job.

Then, came the Dynamex decision. 

The California Supreme Court raised the standard. Now, to be considered an independent contractor, you now had to all meet three criteria:

A) You are free from the control and direction of the employer.

B) You perform work that is outside the hirer’s core business. 

C) You customarily engage in “an independently established trade, occupation or business.”

AB 5 enforces this ABC Test, but its rule “B” that has created fierce backlash from critics, potentially converting millions of freelancers into employees.  

"Misclassification is running rampant and we have to really say that if a company uses a worker as an employee in their basic course of business, they’re an employee," Gonzalez said.

A lot of users have sent her harsh messages on Twitter. 

Gonzalez even got into a profane exchange with someone she says worked in the legislature who tweeted “People won’t be able to do 2-3 side hustles anymore thanks to you and AB 5."

She had some choice words responding:  “They shouldn’t f****ing have to."

She went on to basically tell the person to keep their criticism anonymous until they have a better proposal.

"When you have to take a side job or a third gig or a forth gig, that’s not flexibility, that’s feudalism," Gonzalez said.

Much of the focus has been on Uber and Lyft drivers, but the impacts of this bill go beyond those services. 

Freelance writers, journalists, photographers, and graphic designers all have to follow new rules.

"I’m already aware of probably about $40,000 or more possibly even pushing $50,000 in lost income," said Alice Dubin, a freelance writer.

The idea is if you’re writing more than three articles per month, you should be on staff, but many fear limiting journalists to 35 articles per publication per year could hurt the industry. 

Some media outlets such as Vox have chosen to drop hundreds of California freelancers to avoid any potential liability and critics worry more businesses could follow suit.

However, doctors, lawyers, and other financial professionals are exempted from AB 5.  

Truckers are also currently exempted after they got a judge to issue an injunction.

Meanwhile, Uber, Lyft, and Doordash have shelled out millions of dollars for a ballot initiative in November that would exclude them from the new law.

The challenge has been enforcement. AB 5 enables the California Attorney General, city attorneys, and local prosecutors to sue companies over violations. If this occurs, it would require a judge’s order to force companies to reclassify their workers.

California Senate Bill 459 is an existing law that makes it unlawful for companies to mis-classify workers. It basically gives the state labor and workforce development agency the power to fine companies $5,000-$25,000 per violation.

It does appear California is taking this seriously. 

Governor Newsom just allocated $20 million to boost enforcement for AB 5.

That money will support investigations of labor law violations, increases in workers’ compensation claims, and staff training to properly administer the ABC employment test.

Massachusetts has a similar law that relies on the ABC test. The attorney general there has said there are a lot of complexities, and key terms that are hard to define, allowing for varying interpretations.

According to the LA Times, hiring workers as employees rather than contractors can add 20 to 30 percent to labor costs, given social security and Medicare taxes, unemployment and disability insurance, workers’ compensation, sick leave, minimum wage, overtime, rest breaks and protections against discrimination and sexual harassment.