California's anti-independent contractor law is now affecting other states
I have posted about this before. The law that kills off independent contractors has murdered 1 million jobs in California. Other states are jumping on this bad economic policy. And Joe says he will make it federal law if he wins.
A lot of these losers are independent journalists. I wonder if they have woken up from their self-induced liberal haze.
California’s job-killing AB-5 law, which has already shuttered jobs for as many as 1 million state residents, is influencing other states to weaponize similar regulatory laws against independent contractors.
I live in Indiana, and I'm already losing work with major clients. After being commissioned to write a story for Good Housekeeping Magazine, I began working on it — scheduling interviews and sketching an outline. Days later, I received an email informing me that Hearst, the magazine empire that owns Good Housekeeping and 25 other prominent titles, no longer hires writers from the state of Indiana. My first thought was that they had to be mistaken. After consulting with their legal team and the Indiana Speaker’s House, I discovered that Hearst was spooked by Indiana’s version of the lousy labor law California has adopted. Apparently, it's contagious.
The law in question is the ABC Test, which defines whether a person is an independent contractor or an employee. The ABC Test was written back in the 1930s for factory workers; there have since been many evolutions in the economy and the way Americans work, which is why we have the much more modern IRS Test that leaves true independent contractors alone. The ABC test has just three parts, all of which must be satisfied. A is that the contractor controls his own time and working arrangements; B is that she is doing a service that is outside the company’s line of business; and C is that the person regularly performs the same type of service for other businesses.
Specialized professionals have failed to pass B in more than 300 professions identified in California so far. At least 33 states have some sort of ABC Test and the way things are going, companies are going to take notice just as Hearst did with me. The workers in these professions are our nation’s consultants, our subject-matter experts, the people who earn a better living working for themselves because so many companies in their field want to pay for a piece of their valuable time. I couldn’t pass B because, as a writer, I was in the same line of business as the magazine: publishing. Outside of creating a fraudulent out-of-state address for eligibility, I was out of luck as an Indiana resident. I’ve met several others who experienced the same rejection after accepting commissioned pieces at O Magazine and Good Housekeeping.
Already, businesses in ABC-test states face dire consequences for not complying: potentially thousands of dollars in back taxes, penalties, fines and even jail time. Legal departments don’t want to take that risk, so they have simply stopped working with independent contractors from ABC test states. This type of law spooks employers nationwide. If the PRO Act, a federalized version of AB-5 passes into law, there will be no wiggle room.
What we are experiencing in these handful of states is just a bitter taste of what’s to come if Joe Biden wins the White House and the Democrats take control of Congress, and push the PRO Act — which has already passed the House — through. Biden supports this measure, which will force companies to recognize independent contractors as employees eligible for benefits, or to stop working with them altogether, completely eliminating their income overnight. The latter scenario is what has played out since AB-5 went into effect January 1st in California. Given that the federal government says 55 million Americans are doing independent contractor work, Biden is campaigning on a pledge to outlaw millions of people’s income in the middle of an economic recession.
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Originally Posted by MMC
