Will the Promo Industry See Changes Due to California’s New Gig Worker Law?

California’s new “gig worker” law, Assembly Bill 5, requires California companies to classify independent contractors as employees if the work they perform is a regular part of the company’s business (effective January 1, 2020). The law was designed to offer independent contractors with a more stable work environment with access to workers’ compensation, minimum wage and overtime protections, unemployment and health insurance, paid sick days, etc.

Backlash from the “Gig Worker” Law, Assembly Bill 5:

The law was originally designed in response to perceived problems with how drivers were classified by Uber and Lyft, but is not limited to these companies or even the gig economy industry as a whole. While the law was authored as a solution to an evident problem, there is backlash from both workers and employers in different industries. Postmates and Uber fought back against AB5 by filing a lawsuit alleging that the new legislation violated the constitutional rights of individuals and exhibits unfair discrimination against tech platforms and workers using them to make a living.

Some Jobs and Business Types Are Exempt from California’s “Gig Worker” Law:

There are various professions and types of business that are exempt from Assembly Bill 5. Exempted professionals and businesses number more than 50, but include doctors, lawyers, insurance agents, dentists, hair stylists, accountants, real estate agents and other creative professionals.

In addition to the lawsuit filed by Postmates and Uber, lawsuits were filed on behalf of freelance writers and freelance photographers in federal court in Los Angeles. The suits representing writers and photographers allege that AB5 restricts free speech and the media. Independent truck drivers based out of California were the first to succeed in challenging AB5 - they received a temporary injunction.

Will the Promo Industry Be Affected by Assembly Bill AB5? 

It is not yet clear whether or not Assembly Bill 5 will affect the promotional products industry; it is not specified in the legislation. According to the legislation, some marketing professionals and direct sales salespeople are exempt depending on how they are compensated for their work. Many California businesses are insisting that the law will damage their business. The law is currently limiting sales reps in their ability to secure national accounts with headquarters in California; accounts are on hold as they check with their legal departments and watch for news updates to determine how the new freelancer law will affect their standard practice.                                                

If you need to talk to someone about misclassification or if you need to file a misclassification lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.