A California writer-consultant, reinvention coach, and E-RYT 500 yoga instructor, along with many others, faced drastic changes in their livelihood due to the passage of Assembly Bill 5 (AB5) in 2019. This legislation, aimed at regulating gig workers, effectively banned independent contracting in the state, impacting over 600 professions and disrupting the careers of 4.5 million self-employed individuals and entrepreneurs overnight.
While an exemption (AB2257) was later introduced, it provided limited relief, allowing only certain professions, such as journalism, to continue independent contracting work. However, for many affected individuals, including the writer, opportunities dwindled as national and international companies hesitated to engage California-based workers. This resulted in a significant loss of income and livelihood, forcing some, like the writer, to relocate to states with more favorable labor laws, such as Alabama.
Despite leaving California, the repercussions of AB5 continued to haunt the writer, underscoring the far-reaching impact of such legislation beyond state borders. The recent issuance of the final Independent Contractor Rule by the United States Department of Labor, which mirrors the ABC Test central to AB5, further exacerbates the plight of independent professionals nationwide.
The rule, slated to take effect on March 10, imposes stringent requirements on self-employed individuals and small businesses, jeopardizing the livelihoods of 64 million independent professionals, many of whom are women, single mothers, caregivers, and senior citizens seeking flexibility and economic independence. Critics argue that such regulations stifle innovation and economic growth while failing to provide the promised benefits and protections to workers.
A study by the Mercatus Center revealed the detrimental effects of AB5 on both self-employment and overall employment in California. Contrary to proponents’ claims, the law led to a decline in self-employment by 6.7 percentage points and overall employment by 7.3 percentage points. With the looming implementation of similar regulations nationwide, concerns arise about the potential repercussions on the labor market and economic landscape across all states.
Efforts to challenge the Independent Contractor Rule are underway, with Senator Bill Cassidy and Representative Kevin Kiley vowing to use the Congressional Review Act to rescind the rule. Additionally, advocacy groups like the “Fight for Freelancers” have filed lawsuits to contest the rule’s validity, echoing past opposition to legislation like the Protecting the Right to Organize (PRO) Act.
For years, individuals affected by AB5 have fought against adverse labor laws, utilizing journalism and advocacy to highlight the detrimental impact on independent professionals, particularly women, seniors, and minorities. Despite calls for equity and inclusion, critics argue that such legislation perpetuates inequality and restricts economic freedom, undermining the principles of diversity and opportunity.