Proposed legislation takes aim at AB 5

State Republican lawmakers announced several bills meant to add carve-outs to the employee-presumptive Assembly Bill 5, an expected move given the arbitrary way proponents chose the bills' initial exemptions, an expert said Tuesday.

Introduced in the last few weeks, the laws -- Senate Bills 868, 881, 867, 875 and AB 1925 -- propose indefinite exemptions for alarm service workers, freelance journalists, small business owners, newspaper distributors, and court interpreters and translators, keeping them classified as independent contractors. State Senate Republicans released a statement last week calling AB 5 "a bad law" and "a job killer."

"Republicans will continue our efforts to fight for freelancers in the Capitol," Senate Republican Leader Shannon Grove, R-Bakersfield and a co-author on SB 875, said in a statement.

A final bill, AB 1928, would effectively repeal AB 5, doing away with the three-prong "ABC" test adopted in Dynamex Operations West Inc. v. Superior Court, 4 Cal. 5th 903 (2018) and returning the classification standard to the earlier test set in S. G. Borello & Sons Inc. v. Department of Industrial Relations, 48 Cal. 3rd 341 (1989).

"I can't say I was surprised to see it," said Benjamin M. Ebbink, a labor and employment attorney at Fisher Phillips LLP and a partner in the firm's Sacramento office. "It was pretty clear there was going to be a lot of further legislative activity around this issue in 2020."

Ebbink said most of the bills come from industries that lobbied for exemptions while the bill was in committee and were either rebuked by lawmakers or received less than optimal consideration. For example, freelance writers are exempt from AB 5, but only for the first 35 assignments they submit to a publication.

The same goes for newspaper distributors and delivery drivers who received a one-year reprieve when AB 170 was signed into law last year. The Republican-backed SB 867 and SB 868 would make those exemptions unconditional.

"You had a lot of people last year wanting exemptions or special language dealing with them who didn't get it," Ebbink said. "So you knew those folks who would be back."

The bills are the latest in a salvo of opposition against AB 5. Aimed initially at gig economy companies dependent on contractor-heavy workforces, the law presumes workers as employees rather than independent contractors, so they can receive statewide benefits, including unemployment insurance and workers' compensation.

But the measure has been met with opposition on multiple fronts, including several lawsuits and a $110 million ballot initiative led by Uber, Lyft and DoorDash to carve out an exemption for gig workers in next November's general election.

Some of those efforts have succeeded in halting AB 5. Earlier this month in the Southern District of California, U.S. District Judge Roger T. Benitez granted a preliminary injunction enjoining AB 5 from affecting independent owner-operator truck drivers. California Trucking Association v. Becerra, 18-CV02458 (S.D. Cal., filed Oct. 25, 2018).

Still, getting the new bills through a Democrat-heavy Legislature will be difficult, Ebbink said.

And Assemblywoman Lorena Gonzalez, D-San Diego and the author of AB 5, recently introduced AB 1850, which still lacks details but will act as a vehicle for the Legislature to "further clarify the application" of AB 5, according to the bill's text.

"They like that dynamic of being in control and being the gatekeeper," said Ebbink, who served as chief consultant to the California Assembly Committee on Labor and Employment for nearly 15 years. "But even Democratic members are getting heat in their districts from constituents who fall within some of these industries. So I think it's going to make for some interesting votes for Democratic members."