Initiative blew a hole in landmark labor law

California’s landmark labor law, Assembly Bill 5, isn’t going away any time soon.

Despite the passage of Proposition 22, which exempts hundreds of thousands of gig drivers from the act that regulates who gets to be an independent contractor, supporters say they will protect what’s left.

“AB5 still stands, and we’ll ensure it’s still defended by the state,” said Assemblyman Ash Kalra, D-San Jose, who chairs the Committee on Labor and Employment.

But Assemblyman Kevin Kiley, R-Rocklin, vows to repeal the law, saying he will introduce a bill in January to do so. If his bill won’t succeed, he said he may try to put AB5 on the ballot in 2022.

“I think voters empathically rejected the premise of AB5,” Kiley said. “If people are going to deny the efforts to repeal the rest of AB5, they will have to answer why they are defying the will of the voters.”

The debate over the future of California independent contractors and employees, in other words, is far from over.

A year into its passage, AB5 remains polarizing. Supporters of AB5 say the bill addresses rampant misclassification that deprived thousands of California workers of basic employees’ rights, such as minimum wage. Opponents say it has caused businesses to cut back on hiring, sapping a source of income from thousands.

With the passage of Prop. 22, some say California’s labor landscape in the age of AB5 has become even more contradictory and confusing.

For example, AB5 affects community theaters, which hire actors and staffers as employees.

“You got theaters going under and arts going under because of a law that rideshare companies have been exempted from,” said Karen Anderson, a freelance writer in Orange County and the administrator of a Facebook group Freelancers Against AB5.

Anderson said she has identified 400 different categories of jobs still affected by AB5.

“It’s all the more picking winners and losers,” she said, “and losers are really on the losing end.”

David Townsend, a political adviser for moderate Democrats in the Legislature, said Assembly Bill 5 was a “massively unfair” law that served “the Teamsters” rather than California workers. The bill is “pretty toothless if you take the gig economy out of it,” he said.

But Jill Habig, founder and president of the Public Rights Project, said the law still has a huge potential to lift the standard of living for the state’s low-waged workers, even after tech companies won a carve- out with Prop. 22.

“The job now for workerled organizations, the Legislature, folks who have been really thinking about low-waged workers, is to make sure Prop. 22 is an exception, not the rule,” she said.

The Legislature itself made some changes to the law this year with AB2257, which exempted workers including interpreters, freelance writers, appraisers and musicians in some circumstances.

AB5 still covers the majority of California’s independent contractors, from maids to truck drivers. To classify those jobs as independent contractors, companies still have to meet what is known as the ABC test, meaning they should not impose control over workers in areas such as their hours. Those workers also should perform duties outside the usual course of the companies’ business.

Yet efforts to exempt more workers continue.

The newspaper industry got a one-year exemption from AB5 for its carriers. But with the exemption ending in 2022, the industry is thinking about its path forward.

“We’re still polling our members and researching the issue, talking with legislators to see what options may be available,” said Charles Champion, CEO and President of the California News Publishers Association. “The problem has not been eradicated or solved.”

In some cases, the subject of who’s exempt from AB5 remains in dispute.

Last year, the California Trucking Association sued the state, saying truck drivers should not fall under AB5.

The association won a temporary injunction barring California from applying AB5.

The state has appealed the injunction to the federal 9th Circuit Court of Appeals.

In September, Public Rights Project filed a case to the California Department of Fair Employment and Housing, saying an online home services marketplace Handy misclassified its workers.

Handy has said it believes its company doesn’t fall under AB5’s regulations because changes made this year exempt those that provide referrals for minor cleaning and repair work. Jenny Montoya Tansey, policy director at Public Rights Project, said Handy imposes control over workers, such as charging fees for being late or leaving early.

If the Public Rights Project wins the case, Handy workers will be classified as employees. That means those workers could have more protection against sexual harassment as well as more benefits such as paid sick leave, Habig said.

In an email, Assemblywoman Lorena Gonzalez, D-San Diego, the author of AB5, said she believes most situations have been covered under changes made this year.