Legislation cost me a job and created a financial hardship for my family

Iconsider myself one of the lucky ones. As I started my workday on Dec. 16, reading and responding to emails, one subject line immediately caught my attention, “Contract Expiration Notice.”

You see, I have been an independent contractor (IC), or 1099 Taxpayer for the last five years. My role has been an independent consultant working with all kinds of companies and technologies around social media, artificial intelligence technology, ad content, transcription, even apps and gaming technology. I loved my work as it was varied, interesting, and the projects and when I worked them were of my choosing.

Most importantly, as an IC it allowed me the flexibility that worked for my family. I could drop my son off at school, I could pick him up. I could volunteer in the classroom and on field trips. I could bring him medicine for headaches. I could work around child care issues for my family as well as help out others who found themselves in a bind. I could volunteer in my community. I could work my other small businesses as well. As someone with a slight stutter and social anxiety, I could work at home. I left a mid-level management, well paid, corporate office job as these attributes were important to me.

I could invest in myself. I could contribute to the financial stability of my household without sacrificing what was important to my family.

On Dec. 16, this was all taken away. Even though I had just been qualified and accepted to additional projects and had my contract renewed not even two months earlier, my contract was terminated effective Jan. 1, 2020 . My work queue access, however, was shut off immediately. Out of an abundance of caution from their legal counsel, because of AB5, and the soon to be reviewed federal version, HR2474 , the company I provided my services to terminated all contracts for all California based contractors with the conciliatory, “In the event there is a change to this law, we will consider returning this work to California in the future.”

In the short term, this changed our holidays dramatically as this was completely unexpected. It has left my family wondering how to fill that gap and questioning the gifts and decisions we made for paying down debt, planning family trips and outings over the holidays, down to our already conservative spending for Christmas gifts.

In the long term, the focus is how to replicate this situation. Thanks to AB5, I can’t, as ICs in California are radioactive. No one will take on a contractor in California across more than 150 industries with more than two million individual California ICs. AB5 is unclear to even the most seasoned attorneys and accountants. AB5 requires companies to assume every worker is a W2 employee unless proven otherwise. The penalties are very high so the risk of noncompliance just isn’t worth the risk to these companies who are mostly small businesses themselves. The contracts and the income taxes ICs pay on their contracts are now simply going out of state.

The financial implications have hurt. The exact amount is difficult to measure as I had just accepted several other projects and had been offered additional project hours on my existing projects as the year was closing down. If I had to put a number, my loss of income through January is around $3,500. The emotional toll of anxiety, disruption, depression, outrage, uncertainty, and helplessness is immeasurable.

Why am I lucky? I am lucky because my income was a second income and I have a partner to rely on. I’m lucky because I had some notice as opposed to others who woke up on Jan. 1, and in the following weeks with the same sort of “thank you but we can’t” letters. I’m lucky that I don’t have a disability that makes working and traveling to an office more difficult. I’m lucky because I had an emergency fund. I’m lucky because I am still not over Social Security age and trying to supplement my income and hitting unspoken age bias. I’m lucky because many ICs have spent decades forming relationships, building their brands, and living their dreams, my time investment, by comparison, is short.

For those who want to follow AB5, there are many Facebook groups, one of the largest, with about 10,000 members, is Freelancers Against AB5