Despite Assembly Bill 5 (AB5) having been effective for more than 2 years, it still continues to be a heated topic in employment law. Its impact has been wide-reaching, affecting many industries and companies looking to hire outsourced individuals. As such, AB5 has made many organizations susceptible to misclassification lawsuits and liabilities.
We’ve been getting a lot of questions about how AB5 affects freelance writers, so read on to learn more about how you can navigate the complex AB5 landscape as an employer hiring freelance writers.
What is Assembly Bill 5 (AB5)?
Assembly Bill 5 (AB5) is a California law that codifies the “ABC” test, set forth in the Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) ruling. If you didn’t know, the “ABC” test determines whether a worker is an employee as opposed to an independent contractor. It is important to note that the burden is on the hiring entity, or referral agency, to prove the employee is an independent contractor.
To classify a worker as an independent contractor, it must demonstrate that all the following conditions of the test are satisfied:
- The person is free from the control and direction of the hiring entity in the performance of the work.
- The person performs work that is outside the usual course of the hiring entity’s business.
- The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
How AB5 Affects Freelance Writers
Under AB5, freelance writers may qualify for exemption but with more specific restrictions. Originally, according to the law set forth, a freelance writer, editor, or newspaper cartoonist may be exempt if he/she does not provide content submissions to the hiring entity more than 35 times per year. Details on what constitutes a “submission” have been omitted. This meant that any California-based freelancer who contributes more than 35 submissions to an outlet per year had to be reclassified as an employee.
In September 2020, Assembly Bill 2257 (AB2257) amended certain sections of AB5 and eliminated the restrictions set forth in AB5 that threatened the journalism industry. It got rid of the 35-submission cap for freelance writers, and instead, only required that businesses refrain from displacing existing employees in order to utilize one of these types of contractors. Now, freelance writers do not need to worry about the number of “submissions” they publish in a single forum.
Nowadays, many businesses are choosing to outsource freelance writers. If you currently work with a freelance writer, please be cautious when drafting and implementing agreements to stay compliant with AB5. We recommend employers consult with their legal counsel to help with independent contractor analyses and agreements that accurately reflect the business relationship between the company and the freelance writer.
If you need any assistance with an independent contractor analysis or crafting a legally compliant independent contractor agreement, contact Hackler Flynn & Associates.
DISCLAIMER: Content within this post should not be considered legal advice and is for informational purposes only. Communications made through this post do not create an attorney-client relationship. Hackler Flynn & Associates is not responsible for any content that you may access from third-party resources that may be accessed through or linked to this post. Hackler Flynn & Associates is only licensed to practice in California.
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