California newspapers seek exemption from new law affecting freelancers

by Fred Kuhr
San Francisco’s Bay Area Reporter (BAR) is one of many newspapers in the Golden State that are seeking an industry exemption from the state’s new law limiting the classification of contract workers, known as Assembly Bill 5 (AB 5).
While the new law was originally drafted to help gig economy workers such as Uber and Lyft drivers, it “has ensnared many other industries that rely on contractors,” according to an editorial in BAR. “In our case, AB 5 would be a crippling blow, as the Bay Area Reporter relies on about 50 freelance reporters, critics, photographers, and delivery drivers.”
And in an op-ed in the San Francisco Chronicle, Thomas W. Newton, executive director of the California News Publishers Association (CNPA), and James W. Ewert, the group’s attorney, predicted that AB 5 will lead to the end of home delivery.
BAR noted, “Small news and media outlets like ours simply cannot hire additional full-time or part-time employers — that’s why we, and many other industries, rely on contract workers.”
Proponents of the law argue it will give workers previously classified as independent contractors minimum wage, overtime, sick leave, unemployment and other benefits. It will also prevent the state from losing $8 billion from payroll taxes that independent contractors and companies who use them do not pay. Opponents, however, argue that the law will increase labor costs by up to 30 percent, create higher costs for customers, reduced service, and reduce flexibility for workers.
As noted in the op-ed by the CNPA, AB 5 “would force all businesses to hire independent contractors as employees — unless the business has been given a special exemption by the Legislature. So far, the Legislature has refused to grant one to the newspaper industry.” Such exemptions have already been granted to doctors and realtors.
According to BAR, “Newspapers need an exemption to AB 5.” Thus far, the industry has only won a one-year extension for newspaper carriers.
BAR also argues that a deal struck by openly gay state Sen. Scott Wiener, a San Francisco Democrat, isn’t workable. According to the deal, freelancer writers and photographers could produce 35 assignments a year and still be considered a freelancer.
“But that’s unrealistic in our case, and for many other publications,” BAR wrote. “What’s more, many freelancers may quit entirely if they are limited to such low production volume; after all, they make their living based on the number of articles they write or photo assignments they complete for us and other media. We would have to hire another 50 freelancers, at least, in an economy and region where it’s increasingly difficult, if not impossible, to do so.”

Volume 21
Issue 7

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