Warnings from California, the Harms of Attacking Entrepreneurs
Lilly Walters owned a thriving face-painting business in California–so thriving, in fact, that she often subcontracted with other artists to meet the demand of her clients. But Assembly Bill 5 *(see definition below) changed that. Lilly went from routinely entertaining at corporate family events and ski resorts—large-scale events where she would subcontract with six other artists—to struggling to book jobs. As a talented artist, her clients sought out her work and trusted her to subcontract with other talented entertainers. Lilly appreciated the flexibility and loved that she was able to help other artists, especially those who were just starting in the business.
Under AB5, Lilly is no longer able to subcontract to other artists. The bill has prevented her from being able to take on large-scale events and clients, damaging her business reputation and her income. More than 50 percent of her work has evaporated. The COVID-19 pandemic and resulting shutdowns didn’t help Lilly’s business prospects, but she questions why her state government has made it even more difficult for Californians to earn a living during a global pandemic. She worries that even after the effects of the crisis pass, she won’t be able to financially recover—the negative implications of AB5 will outlast COVID-19.
*Assembly Bill (AB) 5 was recently signed into law in California and has had devastating effects on independent contractors and freelancers in the Golden State. AB5 replaces the common law test with the ABC test to determine whether a worker is an employee or independent contractor. Since the law went into effect on January 1, 2020, hiring entities are now required to classify workers as employees unless they meet all conditions of an ABC test.