California’s Assembly Bill 5(AB5) has devastated the state’s small businesses and freelance workers since taking effect in 2019. According to Will Swaim of the California Policy Center, AB5 reclassified hundreds of thousands of independent contractors overnight, destroying entire industries.
Photographers, truck drivers, and wedding planners saw their livelihoods disappear under AB5’s strict new rules limiting freelance work. While the law targeted gig economy giants, it ended up hurting many independent workers who chose freelancing for its flexibility.
Now, Americans across the country face a similar threat. The Biden administration is proposing to expand AB5-like policies nationwide through vague 339-page federal labor regulations. But as Swaim explains, these complex rules will only serve to empower regulators and big unions at the expense of small businesses and entrepreneurs.
Californians have already witnessed how AB5 crushed small enterprises that lacked resources to fight costly legal battles. Now the same fate awaits small companies relying on freelancers in other states. Faced with severe penalties for non-compliance, many will be discouraged from hiring independent help at all.
If adopted, these national labor policies threaten to stifle the innovation and flexibility that small businesses depend on. In its zeal to curb abuses, the Biden administration risks repeating California’s mistakes on a massive scale. Americans should heed AB5’s cautionary tale before it’s too late to prevent further damage to our economy’s engine of job growth - small enterprises and independent work.
*Views expressed in this video/article are opinions of the author and do not necessarily reflect the views of California Insider.
