4 ms·
I see a lot of comments talking about how this law effects truckers with some commentary about Uber/Lyft type gig workers (who are now exempted). Don't forget
by sbuttgereit 4y ago
I see a lot of comments talking about how this law effects truckers with some commentary about Uber/Lyft type gig workers (who are now exempted).
Don't forget that the blast area of this law is substantially larger than that. I am a independent technology consultant living in the Bay Area. AB 5 significantly complicates my ability to find clients because many of the most obvious clients (other technology related Bay Area companies) are essentially excluded from contracting with me.
From https://insight.ieeeusa.org/articles/ab-5-and-ieee-consultants/ https://insight.ieeeusa.org/articles/ab-5-and-ieee-consultan...
[AB5] contains a long list of exemptions from the new rules — professions that do not fall under the new definitions. One of those exemptions is for engineers — but only for licensed engineers. This narrow exemption will work for professional licensed engineers, but not for most technical professionals.
While the article does talk about the exemptions for business-to-business relationships so long as you've established things like LLCs and deal in written contracts with clients (something I was already doing, so not such a problem for me personally), it also talks about the issues with even this:
Complicating the business exemption is wording in AB 5 that requires contracts between consulting companies and their clients to meet a set of 12 criteria. Most of these are benign (you must have a written contract, you must have a business license), but others are more troubling.
For example, consulting companies must have “contracts with other businesses to provide the same or similar services and maintains a clientele without restrictions from the hiring entity.” The problem is that some contractors work with just one company. These consultants may want to branch out and find at least one other client. On the other hand, courts in Massachusetts and New Jersey have ruled that similar language in those states’ laws does NOT mean consultants need to have more than one client, only that they could have additional clients if they chose to. California courts don’t have to consider how the law is interpreted in other states, but they generally give other states’ legal opinions weight.
A final problem with the business exemption is that several criteria, including the one above, assume that the consulting company is already in business. That could make it hard to become a consulting company. Getting your first client will be difficult if you first have to prove you have other clients.
What this means is that even though I can meet these tests, for many of my prospects having to sort out whether or not they can contract with me on a business-to-business basis is just overhead for them. Better for them to just give up on the idea of contracting with me and just put up a job posting or hire a larger company.
I strongly support the repeal of this law. There is often times nothing worse than to be the "beneficiary" of the good intentions of others.
- anon291 4y ago> A final problem with the business exemption is that several criteria, including the one above, assume that the consulting company is already in business. That could make it hard to become a consulting company. Getting your first client will be difficult if you first have to prove you have other clients. Cynical me says this is the purpose of the law and why only Uber and Lyft fought it. Existing contracting companies (the big guys) benefit from this as there will forever be less competition within California. Win win.