How are you adapting your business model to comply with California AB5?
Asked by a business in Van Nuys
It was Plato who said: “Necessity is the mother of invention.” It is the primary motivating factor in innovation. It was H. G. Wells who said “Adapt or perish.” Me? I say “Onward and upward!” Here's how Sharpo!® plans to survive the changes to the gig economy in 2020.
California AB 5 (Gig Economy Bill) has been signed into law. In the 30 + years I have been entertaining at parties and events, performers in California have been treated as independent contractors. Most event and party performers I know love this arrangement. BUT this new law changes everything.
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Answers (1-6)
I have some concerns about how this will affect captioners for people with disabilities. Captioners, and sign language interpreters, work as indepent contractors for an agency. It's a complicated issue for us. This may conflict with ADA. They are looking for legal advise. Some buisness , have paid lobbyist or lawyers to assist in getting an exemption. The lead agency is nonprofit, which complicates the issue. Thank you for bringing this up. If anyone has a suggestion , or wants to help ,contact me ♿
My liability insurance does not allow me to hire subcontractors to perform my company’s work. All of my employees are W-2s
The best way to resolve this issue from an employer standpoint is to only hire COMPANIES, i.e., businesses that have incorporated. There is no question by EDD that working with a company is not hiring an employee. It also resolves the liability insurance issue, because corporations should provide their own insurance. The best way to resolve this is if you're a CONTRACTOR is to incorporate. Yes, it costs $800 per year, but there is no question that you own your company and that you are contracting with other businesses. That is my best understanding for safely continuing to do contracting work for other businesses.
As a union actor, I have been assured by Sag-Aftra that AB5 will not change how loan-out corporations do business with employers. I am not classified as an independent contractor. I am an employee of my corporation being hired by (loaned out to) another corporation.
I only do union work. AB5 may effect you differently if you are not incorporated, I don't know.
As for UW Productions, we also only produce union work, so no changes in how we hire anyone. The rates are set. We are insured and always use a payroll company.
My short film got audited by the EDD last year (one of my crew got injured on a shoot AFTER mine, mistakenly listed ME as a "previous employer" when she submitted for Worker's Comp...) and it cost me a bundle- mostly for the attorney I had to hire. A producer I spoke with says that you can use a payroll company to pay the crew as employees and you end up only paying a small percentage more if you do it that way. So far that's the only way I've heard of.
This is a way for government to make it hard for small businesses to survive with all these additional charges. You can't afford to hire anyone. You have to pay employment taxes on yourself