E268. AB5 Going National Will Be A Disaster - Kevin Kiley
Jan 18, 2024
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California Representative Kevin Kiley discusses the disastrous consequences of the AB5 bill going national, its impact on independent contractors and small business owners, and the workarounds to implement it despite not passing through Congress. They also explore how AB5 infringes on individual rights and disproportionately affects women and vulnerable populations. The podcast addresses the steps to prevent a national version and the lack of attention on this pressing issue.
AB5, a law passed in California, severely restricts the ability to work as an independent contractor, affecting various industries and taking away the flexibility and livelihood of millions of Americans who have chosen the independent contractor model.
The Biden administration is attempting to nationalize AB5 with the ABC test, infringing upon an individual's right to work as an independent contractor, but efforts to fight back against the national expansion include potential congressional review, legal challenges, and public advocacy.
The real motivation behind AB5 is suggested to be increasing union membership and revenue by bringing more individuals into unions, while the negative consequences extend beyond restricting independent contractors to disproportionately affect vulnerable groups and result in businesses closing and population decline in California.
Deep dives
AB5 and Its Impact on Independent Contractors
AB5, a law passed in California in 2019, severely restricts the ability to work as an independent contractor in the state. The law redefines the distinction between employees and independent contractors, making it difficult for many professions to qualify as independent contractors. This has affected various industries, including the gig economy, ride-sharing services, writers, musicians, and more. The law has been criticized for taking away the flexibility and livelihood of millions of Americans who have willingly chosen the independent contractor model. AB5 has faced legal challenges, and there are ongoing efforts to reverse or defang the law through congressional actions and court challenges.
The Proposed National Expansion and Challenges of AB5
The Biden administration is attempting to nationalize AB5 with a similar rule called the ABC test, aiming to redefine the worker classification nationwide. However, the direct legislation for this national expansion, known as the PRO Act, has not been passed yet. The implementation of the rule is currently being finalized by the Department of Labor. Critics argue that such a rule infringes upon an individual's right to work as an independent contractor, and many industries and small business groups have voiced their opposition. Efforts to fight back against the national expansion include potential congressional review, introducing language in appropriations bills to defund the rule's enforcement, legal challenges, and public advocacy.
Motivations Behind AB5 and Its Impact
The proponents of AB5 argue that the law is necessary to protect workers from being misclassified by unscrupulous employers. However, critics point out that existing laws and regulations already address this issue, and AB5 unnecessarily restricts the rights and career choices of millions of independent contractors. It is suggested that the real motivation behind AB5 is to increase union membership and revenue by bringing more individuals into unions. The negative consequences of AB5 extend beyond restricting independent contractors. It disproportionately affects vulnerable groups, such as single parents, seniors, individuals with health challenges, and those seeking flexible work arrangements. The impact of AB5 on California has resulted in businesses closing, a decline in population, and an outmigration trend.
The Impact of California's AB5 Law
The podcast episode discusses the impact of California's AB5 law, which reclassified many gig workers as employees. The speaker highlights how the law resulted in unintended consequences, leading to job losses and even affected major media outlets like Vox. The law's national ramifications and potential impact on federal law compliance are also emphasized.
The Concerns over Independent Contractor Classification
The second main point focuses on the concerns raised about the classification of independent contractors. The discussion highlights the lowering of the 1099 requirement limit and its potential impact on small businesses and workers. The importance of independent contractors for providing flexibility and job opportunities is highlighted, and the need for a bipartisan approach to support working individuals is emphasized.
California Representative Kevin Kiley, sits down with Bridget to discuss the consequences of the disastrous California AB5 bill going national, and what we can do about it. They cover the realities of AB5 and how it decimated independent contractors in California, how it effects small business owners, Biden's failure to get a national version passed through Congress and the work around he's found to do it anyway, how it infringes on your rights to work for you who want to and how you want to, why it has a disproporitionate effect on women and vulnerable populations exactly the people it claims to protect, the real reason behind this law, and why needing the government’s permission to work obviates the idea of a right to earn a living. They also talk about the steps lawmakers are taking to prevent a national version from taking effect, what individuals can do, and why this issue isn't getting the attention it deserves.