Dude, I’m like, totally with you now

I confess. I haven’t paid enough attention to the new, misguided “AB5” law in California, that would force companies to treat hundreds of thousands of independent contractors as employees.

There were three reasons:

  • First, I assumed California would work it out and fix the law.

  • If not, well, I haven’t lived in California since 2002, so it doesn’t apply to me.

  • Finally, if I’m being honest, it arguably benefits me, since some companies say their workaround is to stop doing business with anyone in sunny California. (I now live in cloudy New Jersey. More work for me!)

Recently, however, I was invited to join two Facebook groups — one for independent contractors in New Jersey, and the other for New York, where most of my consulting and publishing clients are located.

After joining, I got a quick lesson in why people in business should pay attention to local politics.

(Warning: today’s article is kind of political, and I definitely think there’s a right side and a wrong side.)

I’m Bill Murphy Jr. Welcome to Understandably, a daily email newsletter.
If you’re new here, why not add your info and sign up here

Share

‘Outside the usual course of business…’

In short, it turns out New York and New Jersey are now fast-tracking their own versions of the California law.

So: “Nous sommes tous Californians!” Or else: “Ich bin ein Californian.”

Or maybe: “Dude, I’m like, totally with you now.”

Here’s the situation. In California, effective Jan. 1, the state will presume that every worker is an employee, not an independent contractor, unless the company that hires them can prove:

  1. the worker is free from control and direction in the performance of services; and

  2. the worker is performing work outside the usual course of the business of the hiring company; and

  3. the worker is customarily engaged in an independently established trade, occupation, or business.

In theory, it’s designed to protect gig economy workers, like Uber drivers. And they have my sympathy (assuming they want it).

But as written — mainly because of that second prong — the law kinda screws over many independent contractors who would much rather stay that way. They make more money as ICs than they would as employees, and they enjoy the flexibility.

Texas, Florida, Georgia, Massachusetts…

Now, the idea that this could be coming to New York and New Jersey has people freaking out. I’m now one of them.

And be warned: I don’t think it’s going to stop with these states.

Personally, the last thing I want is to become anyone’s employee. The bigger danger is that some of my clients might decide simply not to take the risk of hiring New Jersey independents.

That would slash my income. I hate to go all Chicken Little, but my family and I would probably move to another state.

Where to go? Well, I tend to wax poetic sometimes about Texas and Florida; my wife seems partial to Georgia. We have family in Massachusetts, and I love Cape Cod.

But, there’s reason to be afraid there, too, after I talked with a spokesperson at Rev.com, a transcription site I use that hires a lot of freelancers.

It’s stopped doing business in California because of AB5, and now it’s no longer hiring in New Jersey and Massachusetts, “in anticipation of similar legislation passing.”

‘More than I made…’

I also heard from another company — an online tutoring site called VIPKid that uses freelancers throughout the U.S. and Canada:

“As of December 1, VIPKid will not partner with new teachers who are based in California.”

It has real ramifications. I talked with a tutor named Moira Larrea, who is part of the New Jersey Facebook group, and who told me she used to be a teacher and an administrator in a childcare center.

When she developed some health problems that made it hard to go to a regular job every day, she started tutoring instead.

As she put it, as an independent contractor, she has “control over my schedule. I can work around doctors appointments and take the time I need to rest when my body needs it.”

And she makes a lot more money: “up to $26 [per] hour with incentives,” which is “more than I made as an administrator at a very large childcare center.”

‘I remain hugely concerned’

I’ve lived in six states plus Washington, D.C. So it’s taken a while for me to feel like New Jersey is home.

But for all my, “Honey, we’re moving to Austin or Clearwater” bluster, I worked the phones last week.

I looked up the state legislators who might have a say, and I left the same message with whatever poor soul answered the phone each time.

I called the governor of New Jersey, too.

During the first call, the nice woman I spoke with had no idea what I was talking about; by the time I called on Friday she could recite the state Senate and Assembly bill numbers of the top of her head.

So that’s progress. As was a statement from the state Senate president in New Jersey that said he’d “amend” the bill and ensure that “[t]he status of freelance journalists will not change.”

Still, “I remain hugely concerned,” said award-winning freelance journalist Kim Kavin, a moderator of the Facebook group. “Our lawmakers … have no idea how what they are doing even affects people like us.”

Other links worth reading:

  1. “OK” vs “Ok” vs “okay” vs “kk.” Seriously, you need to know this now. (Inc.)

  2. Mike Bloomberg turns down my advice, and announces he’s running for president. (Twitter)

  3. Protests delay the Harvard/Yale football game, and as the stadium doesn’t have lights, it ends in darkness. (ESPN)

  4. More than a quarter of men in the US would rather their favorite football team win the Super Bowl than their preferred candidate win the presidency, a new poll shows. (New York Post)

  5. The Secretary of the Navy was fired — or resigned — over direction from President Trump to let a disgraced Navy SEAL keep his insignia. (Associated Press)

  6. More than 187,000 people put down $100 deposits on a Tesla Cybertruck. I was one of them because I thought it would be funny. (Axios)

  7. Debate rages: Are koalas “functionally extinct?” (CNET)

Ideas and feedback actively solicited. Find me anytime at billmurphyjr@understandably.com, or on LinkedInFacebook, or Twitter. Be excellent to each other.