PD Editorial: AB 5 strips gig workers of their independence

Helen Megan of Santa Rosa and at least a dozen other Northern California travel agents have written to The Press Democrat, warning that they will be put out of work if Assembly Bill 5 becomes law.

“I have been an independent travel adviser in California for more than 10 years,” Megan wrote in a letter published July 26. “It allowed me to work at home while taking care of my husband who was post-polio and had Alzheimer's. It also allowed me to take him on cruises at reduced rates, as a concierge host. This was a very effective business model for our situation and allowed me to pay taxes to support our government, too. My husband is dead, now, but I continue to work. This will be my best year ever.”

Travel agents aren't the only people whose livelihoods are threatened by AB 5.

The bill, which is nearing a final vote with strong backing from organized labor, would disrupt the work lives of 2 million Californians who earn their living as gig workers or independent contractors. It surfaced after a 2018 state Supreme Court decision involving a Southern California delivery company called Dynamex, which reclassified its drivers as independent contractors. In its decision, the court established a three-part test to distinguish independent contractors from employees, but the ruling limited its employee protections to wages and hours.

AB 5 by Assemblywoman Lorena Gonzalez, D-San Diego, goes much further, requiring employers to provide unemployment and workers compensation insurance, sick leave and family leave and other benefits to people previously classified as independent contractors. As employees, they also would be subject to payroll taxes.

The likely result would be a purge of contract workers, many of whom operate as small businesses, have other jobs or simply prefer the flexibility of mixing work with child care, elder care or other pursuits.

Moreover, the state Department of Finance predicts there would be substantial taxpayer costs for enforcement and unemployment claims.

The primary targets of AB 5 are companies like Uber, Lyft, Handy.com and Postmates - online platforms that match customers with drivers, repairmen, food deliver and other services.

But the impact would extend far beyond Silicon Valley - rewriting the rules for everyone from building contractors and interpreters to freelance writers and the people who deliver newspapers.

A handful of exemptions have been granted to politically influential employers and contractors, among them physicians and surgeons, insurers, securities dealers and licensed sales people, such as real estate agents.

When news publishers requested exemptions for freelance writers, Gonzalez amended her to bill to allow them up to 25 articles per publication per year. The arbitrary limit might not stand up to First Amendment scrutiny, but her failure to exempt newspaper carriers - who have been recognized by the state as independent contractors since 1987 - could force some publications to scrap their print editions and rely solely on online publishing.

AB 5 cleared the Assembly, with all three of Sonoma County's representatives - Cecilia Aguiar-Curry, Marc Levine and Jim Wood - voting yes. The bill is awaiting action in the Senate Appropriations Committee. Gov. Gavin Newsom hasn't taken a position, and Sens. Bill Dodd and Mike McGuire have yet to cast votes. We urge them to oppose AB 5 unless it is amended to ensure that Helen Megan and other contractors don't lose their independence.

You can send a letter to the editor at letters@pressdemocrat.com.