Top Employment Laywer: New AB5 Exemption Law ‘Not Much Better’

LOS ANGELES—Last week, California Governor Gavin Newsom signed into law the bill known as AB2257, which carves out more than a dozen new exemptions for industries that hire independent contractors, or “gig workers,” which under the controversial AB5 law would have been forced to hire those freelancers as employees — or fire them. But a new analysis by a top employment lawyer, published by the legal site JD Supra, says that AB2257 is “not much better” than AB5, which has already thrown California’s “gig economy,” including much of the adult industry, into confusion. As AVN reported earlier this week, the AB5 law, which took effect at the start of this year, forced most employers to apply a stricter test, known as the “ABC Test,” to their freelance hires, to determine if they must be hired as company employees.  As a result, many freelancers found themselves out of work. One employer alone, Vox Media, reportedly fired 200 freelance writers and other workers rather than be forced to hire them on as AB5 would have required. AB2257 carves out an exception to the law for freelance writers, as well as performers, musicians, translators and workers in several other categories. But according to employment lawyer Richard Reibstein, in his JD Supra analysis, “the new law only tweaks AB5 and is essentially unchanged in any meaningful way for the overwhelming number of companies and freelancers doing business in California.” The AB5 law was authored by San Diego-area state Assemblymember Lorena Gonzalez, who explained the law as a direct response to a state Supreme Court decision, Dynamex Operations West v. Superior Court of Los Angeles, which ruled that truckers working as “independent contractors” for a shipping company must be reclassified as employees.  “AB5 narrowed the Dynamex decision’s impact; it did not broaden the decision,” Gonzalez claimed, in a response to critics of the law.  But Reibstein, a partner in the law firm Locke Lord LLP, and former attorney with the  U.S. Department of Labor and the National Labor Relations Board, says that in reality, AB5 did quite the opposite. “AB5 dramatically expanded upon the application of the 2018 Dynamex decision by the California Supreme Court,” Reibstein wrote. “The decision in Dynamex was limited to so-called ‘wage order’ claims and did not apply across-the-board to all types of independent contractor claims in California including overtime and expense reimbursement claims. AB5 changed all that.” In addition to 50 industries that were exempted from the strict “ABC Test” by AB5, AB2257 adds 15 more. But Reibstein says those exemptions are arbitrary, creating the impression that the law favors certain types of work — for reasons that remain mysterious. “There is no rhyme or reason why independent contractors in 65 specific industries are eligible for an exemption from the ABC test, yet contractors engaged in providing services in hundreds of other industries are not,” according to Reibstein. “This type of legislation lends credence to the belief that AB2257 unfairly favors some industries, thereby provoking outrage and a feeling that certain professions, trades, and occupations were unjustifiably overlooked.” As AVN reported, AB2257 does not mention the adult industry, though it does provide an exemption for “performance artists,” with several conditions — leaving the status of adult performers and other “gig” workers in the industry in a state of confusion. Photo By Tony Webster / Wikimedia Commons