Coalition of gig workers, businesses urge lawmakers to protect independent contractor status

A coalition of self-employed workers and business leaders are urging state lawmakers to expand a bill that would allow more independent contractors to be exempted from employee status.

At a press conference held Wednesday at the Pasadena Chamber of Commerce, the group said it’s seeking additional changes to Assembly Bill 5 by Assemblywoman Lorena Gonzalez, D-San Diego. The legislation exempts doctors, insurance agents, securities brokers and direct sellers (Mary Kay, Amway, etc.) from adhering to a 2018 California Supreme Court ruling that redefined what an independent contractor is.

The new rules

Under the court’s new “ABC” standards, a person or business is considered an independent contractor only if (A) they are free from the control and direction of an employer; (B) the work they perform falls outside the employer’s core business; (C) they have their own independent business or trade beyond the job for which they were hired.

Some of those seeking an expansion of AB 5 want a variety of other workers exempted, including rideshare drivers, dietary consultants, engineers, lawyers, therapists, hair stylists and others who have advanced degrees, are licensed by the state or simply want to remain independent contractors.

They have joined forces via the  I’m Independent Coalition to have their voices heard in Sacramento. Many say they need job flexibility and additional income, and legislation will ensure their livelihoods are not taken away.

Representatives from Gonzalez’s office could not be reached Wednesday, but last month they said discussions regarding AB 5 are ongoing.

Personal stories

Jimmy Thompson, who spoke at Wednesday’s press conference, is among those seeking exemption from the court ruling. The 36-year-old South Pasadena resident is a Realtor who also works as a Lyft driver. The rideshare job allows him to earn extra cash without the rigid demands of being a company employee.

“The reason I like being independent is that I can choose my own schedule,” he said. “I see a house and can turn on from right there and drive for a couple hours. Rideshare drivers enjoy the flexibility of just turning on and turning off. There is no boss telling you when or where to be.”

Tina Kerrigan, a dietary consultant who provides contract service at skilled nursing facilities, assisted living homes and in residential care businesses throughout Southern California, feels the same way.

Independent contractors have been a staple of California’s dietetics industry for more than 50 years, she said.

“These skilled nursing facilities, assisted living homes and residential care businesses do not require a full-time or even part-time registered dietician employee,” Kerrigan said. “They often choose and prefer to have a consultant.”

Being reclassified as an employee, she said, would end her work flexibility and result in about a 30 percent drop in pay as she’d have fewer clients.

Flexibility and higher wages

Bill Manis, president and CEO of the San Gabriel Valley Economic Partnership, supports an expansion of AB 5.

“Our concern is that many Californians who choose to work as independent contractors do it because it suits their personal schedule,” he said. “It’s a career goal they have and it’s a lifestyle. They have the ability to negotiate compensation, work for multiple employers, earn more money or work part-time to care for things like their family.”

A recent survey, he said, found that nine out of 10 independent workers prefer freelancing over the typical employer/employee work model.

“By denying these contractors the chance to work independently, the Dynamex decision throws hundreds of thousands of Californians into limbo,” he said.

Last year’s California Supreme Court ruling dates back to 2004 when Dynamex, a package and documents delivery company, converted its drivers to independent contractors in a move to save money.

A few months later, a group of drivers sued, claiming they performed the same basic tasks in the same manner as when they were employees but without the protections of the California labor code and wage orders, which regulate wages, hours and working conditions.

In April 2018, the court ruled in favor of the drivers. But it based its decision on the newly created ABC standards that had never been used in the state.