Many independent contractors have found themselves caught in a whirlpool since California’s controversial AB5 law went into effect on Jan. 1—and the pandemic has intensified it.
The law prevented them from working on a contract basis, and it meant they had to find full-time employment instead, something many of them have struggled to do.
The COVID-19 pandemic and the current economic uncertainty has made that even more difficult, and calls to suspend AB5 have ramped up.
“This is both an argument about economics and an argument about humanitarian needs,” Dr. Williamson Evers, a senior fellow at the Independent Institute, told The Epoch Times
“We should be encouraging opportunities for jobs, or helping. We shouldn’t be blocking jobs.”
The letter was initiated by the Independent Institute, which bills itself as a “non-profit, non-partisan, public-policy research and educational organization.”
But while opponents say the law has cost independent contractors millions of jobs, supporters continue to steadfastly defend it, arguing AB5 guarantees benefits and rights to workers that are long overdue.
When Rep. Darrel Issa (R-California) recently joined the chorus of voices asking Gov. Newsom to suspend the law, calling it “an economic drain on our current society,” one of the bill’s original authors responded sharply.
But the new open letter argues that the law has had unintended consequences, and “has pushed all of the risks and all of the costs of a vibrant gig economy onto lower- and middle-income individuals.”
“By prohibiting the use of independent contractor drivers, health care professionals, and workers in other critical areas, AB-5 is doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them,” the letter states.
It adds that the self-isolation caused by the current pandemic has “created an immediate need for flexible and low-cost ways of delivering goods to customers”—and that these needs could be “served by enabling independent contractors currently hindered by AB-5.”
“Economists easily understand the problem,” Evers explained. “Many political scientists understand, too—so they were already willing to sign.”
By not classifying their workers as employees, the companies avoided paying taxes and benefits, including sick days and unemployment insurance.
“By refusing to comply with the law to classify workers as employees … these companies deliberately held up funds that drivers could be using now to pay for necessities like rent and food,” he added.
“There are a million more workers here who are also suffering, all because the companies they work for refuse to call them employees.”
Still, Evers doesn’t think the legislators ever foresaw how AB5 would keep independent contractors, in hundreds of industries, from working. The letter argues that “hiring someone in a traditional job, with hours and benefit requirements, is too expensive” in the current pandemic.
“A mountain of work needs to be done, deliveries made, and people stranded at home helped to receive groceries and medications,” the letter states.
“Meanwhile, furloughed Californians stand on the verge of being wiped out financially because the law prevents them from working part time in a variety of indispensable positions.”
Many different groups—including nurses, drivers, and performing artists—agree, and have started petitions on Change.org, hoping to repeal AB5.
The letter adds: “While employers are not hiring, gig workers could shoulder myriad tasks that are needed to flatten out the effects of the temporary emergency. It doesn’t really matter how great the pay is, how predictable are the hours, nor how generous the benefits may be, if the law prevents a job from existing in the first place.”
Another hurdle independent contractors have been facing during this time has been receiving relief funds, since they are not classified under any employer.
But on April 15, Gonzalez said via tweet that all independent contractors and sole proprietors, including gig workers, would be able to file for unemployment assistance beginning on April 28. The assistance would be retroactive and would apply to all “misclassified employees,” meaning those who work freelance jobs.
More than 22 million American workers have filed first-time unemployment claims in the past four weeks. Meanwhile, the debate rages on, and opinions diverge widely on social media as well.
Gonzalez’s office did not immediately reply to request for comment.
