Coaches, musicians and more to be exempted from California labor law under Democratic plan

California Democrats on Thursday released a final package of exemptions to a new state labor law that requires businesses to give benefits to more employees, allowing more leeway for youth sports coaches, artists, appraisers and insurance field representatives to work as independent contractors.

The proposed exemptions come in the form of Assembly Bill 2257, a “clarification bill” to the 2019 labor law known as Assembly Bill 5. The bill with proposed exemptions is backed by Assemblywoman Lorena Gonzalez, D-San Diego, who was the main advocate for the new labor law.

Gonzalez has said she knew AB 5 would have to be refined after Gov. Gavin Newsom signed it last year. It’s been challenged in court by truck drivers and by gig economy tech titans like Uber and Lyft. A coalition of tech companies that includes Uber, Lyft and DoorDash is also seeking to exempt gig economy drivers from the law through a ballot initiative.

The law restricts when businesses can label workers as independent contractors versus employees. It requires companies to give employee benefits to workers such as overtime and sick leave to more workers. The existing law requires companies to determine whether a worker is an employee using a three-part “ABC” test.

“We’re hopeful that with AB 5 and now with a cleanup-language (bill) that we’re just going to make it a lot more clear because it’s never good for either the worker or the employer to not know if they fall into a category of employer-employee or independent contractor. It should be clear from the beginning,” she said.

One of the reasons Gonzalez said she wrote AB 5 was because of the worker misclassification she saw among janitorial, car wash, garment and retail workers, many of whom are Latino immigrants.

The bill is expected to be voted in the Senate next week. If passed, it will be sent to Gov. Newsom to sign and will take effect immediately.

It has exemptions for a broad range of people who work in the music industry and other artistic careers. It also has exemptions for some interpreters. Freelance writers and photographers would also gain new exemptions from AB 5 under the new bill.

Bruce J. Sarchet, a labor and employment law attorney at Littler in Sacramento and California liaison for Littler’s Workplace Policy Institute, said the recording industry got the exemptions it wanted from the bill, including carve-outs for marketing and distribution.

Due to the number of legal challenges associated with AB 5, he said the bill “does a number of things, but basically maintains the old model of AB 5, throws in about 26 more exceptions. And the struggles of the state, with regard to this issue, just are going to continue.”

This story was originally published August 27, 2020 at 4:07 PM.