Newspapers seek help to delay AB 5 delivery rules
Newspaper publishers are backing a bill making its way through the California Legislature that will buy the industry more time before the state’s controversial Assembly Bill 5 forces big changes to longstanding delivery practices.
AB 5, signed into law by Gov. Gavin Newsom in 2019, is upending the gig economy, forcing companies to recategorize ride-hailing drivers and many independent contractors as employees. The law codifies a 2018 ruling by the state’s Supreme Court that said workers misclassified as independent contractors lose rights and protections including a minimum wage, workers’ compensation and unemployment compensation.
Newspaper publishers are hopeful Assembly Bill 323, dubbed the “Save Local Journalism Act,” will become law before the legislative session ends this month, giving the industry two more years to figure out how to meet new workplace standards. If it fails, they contend jobs will be lost and the flow of printed news editions will change.
“Who will get punished?” asks California Newspaper Publishers Association CEO Charles Champion. “The people who are getting the news; the carriers who distribute it; and it will drift into newsrooms, too.”
Delivery at stake
For years, news publishers have used a network of independent contractors to get daily newspapers to doorsteps from printing presses in a relatively quick period. AB 5 will require those drivers, primarily working part-time for third-party vendors, to be considered employees.
Newspapers, withered for years by declining advertising revenue and fierce online competition, lack the financial wherewithal to absorb the costs related to AB 5 mandates. The CNPA estimates the switch would add $80 million annually to distribution expenses.
The industry’s steep economic hurdles were amplified this year by coronavirus lockdowns, which cut much of the remaining advertising revenue brought to publishers by print editions. Despite an increase in paying, online subscribers, the traditional morning paper remains a major contributor to industry profits.
The bill’s author, Assemblywoman Blanco Rubio, D-Baldwin Park, is concerned that if newspapers don’t get a two-year exemption, industry jobs will be lost and many Californians — especially the elderly and those in minority communities — will lose critical sources of information: the printed paper.
In her own district of 500,000 residents, she counts 46 small news services that could be “disenfranchised” by cutbacks the industry may be forced to take. Rubio makes special note of speakers of foreign languages “who don’t Google something to get their news” and older people,