Remembering AB5: The Pandemic and Gig Workers

Remembering AB5: The Pandemic and Gig Workers

It was just a year ago that California’s independent contractors, or gig workers, kicked off the year wondering how to either leverage or circumvent AB5, the law intended to give them workplace benefits. Lawmakers assumed that companies would comply with this new law and convert those gig jobs into full-time positions. While pure in its intent, those who framed this law may have underestimated the scale and reach of the gig economy. Many gig workers are seasonal, others are temporary and/or work part-time in the evenings or weekends. Others are retired seniors who work part time to supplement their social security. The bottom line: Millions of Americans have been working as contractors for years because they need or want the flexibility these jobs provide.

AB5 reconfigured the employment landscape

AB5 intended to fundamentally alter the working conditions for professionals as diverse as musicians and journalists, construction workers, truck drivers and ride-share providers. It includes physical therapists and massage therapists, all of those who work backstage in our theaters and concert halls. It’s the person who cleans your home or office and the great tech guy who responds to your computer meltdowns. The handyperson who’s a whiz at home repair projects is self-employed and not on anyone’s payroll to receive benefits. The people who cut and color your hair, do your nails, walk and groom your dog and deliver your takeout. They’re all gig workers. They’re often doing work they love, but there are no vacation benefits, no sick leave or 401k.

What happened to AB5 when the Coronavirus struck?

By Mid-March, AB5 took a backseat to the looming coronavirus crisis. Here in California, we began a lockdown order that extended through May. This is when nothing was open but grocery stores and pharmacies. We fought over the last roll of toilet paper and there wasn’t a bottle of bleach to be found on grocery-store shelves.

It was gig workers who moved to the front lines of the crisis

Delivery workers, truck drivers and other independent contractors were and still are the essential workers who are keeping the world moving. Since gig workers are classified as independent contractors, these essential worked long hours without benefits.

Before the pandemic, tentative court rulings related to AB5 began to trickle through the superior courts of California. California v. Maplebear Inc., decided in February, a case in which the city of San Diego alleged that a same-day grocery delivery company maintained “an unfair competitive advantage” by misclassifying its shoppers as independent contractors and evading the worker protections under California law.

In April, Judge Vince Chhabria of the U.S. District Court for the Northern District of California heard an emergency injunction filed by Lyft drivers.

So what’s next for AB5?

As unemployment numbers continue to grow and unemployment claims hit historic levels in California, many are turning to gig work to make ends meet. This may or may not be the time to either suspend or enforce this law. Some criticize AB5 for standing in the way of helping the state’s economy scratch back from the impacts of the pandemic. Here are two sides of this highly controversial topic:

  • Graham Walker, the executive director of the Independent Institute in Oakland: “Just when they need the flexibility, AB5 has come along and stifled them. I don’t think Californians who are hurting can afford the limitations forced on them by AB5.”
  • According to AB5’s author, Assemblywoman Lorena Gonzalez (D-San Diego): “I think it would be the worst time to suspend it. These are billion-dollar companies who are publicly traded, they have enough money to treat their employees correctly.“

The coronavirus will take priority—at least for now

Our legislators and medical experts all tell us that we can’t do anything until we “crush the virus”. Many of our clients are dealing with the pandemic’s uncertainty by creating Living Trusts. Knowing that your family will inherit your estate as you have planned is providing some peace of mind for many of our clients.

Our Living Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Will. If you have children under 18, it means that you can select their Guardian rather than having the court appoint one for you. Schedule an appointment at Guideway today. We guide you through it and we prepare the legal documents.

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