The Evolving Freelancer: California's New “Gig Economy” Law
The gig economy is booming more than ever. With the rise of tech, the need and dependency on contract work is increasing, especially in creative fields. In response to this, California has enacted a new “Gig Worker Law,” AB5, designed to extend employee classification and regulate companies that hire gig workers in large numbers such as Uber, Lyft, and Doordash. The bill went into effect as of January 2020, and it has garnered mixed reactions.
This new law was written with companies like Uber and Lyft in mind since they have been cutting labor costs due to classifying workers as independent contractors rather than employees. However, these are only a few of the companies affected by this new law, and it may cause significant complications for others, especially in creative industries.
Since the law encompasses a broad range of employment situations, employers may be hesitant to keep their contract employees. Employers may be less likely to switch the contractor to an employee status and eliminate their position. To air on the side of caution, this then could result in employers strictly outsourcing contract work outside of California.
What does this mean for freelancers and employers in the design industry? Various roles within the design field require individuals to wear a variety of hats, resulting in contract work being the norm. The nature of laws are complex and often have exemptions. If you are a contractor or employer and want to verify that you aren’t affected, you can review the list of exempt workers.
The “Gig Worker” law is receiving an excessive amount of backlash, and there is news that they may be reassessing it. If you’re affected and looking for potential next steps, COUPAR could be a viable option for both design freelancers and employers. Learn more about working for us at Careers or contact us at info@couparconsulting.com.
