As a former California resident with many friends still there, I watched with horror as Assembly Bill 5 (AB5) was passed. The bill, which takes effect January 1, 2020, reclassifies many independent contractors as employees. The upside is that some workers in this gig economy will gain employee benefits and other worker protections. The downside is that my California-based freelance writer friends and other independent contractors in other fields already are having clients cut back their work or eliminate it altogether as a result.
I saw what was happening in California and felt a sense of relief that I was no longer living there. But that was short lived, because this week I found out that the New Jersey legislature is fast tracking legislation S4204/A5936 to classify workers as employees in a more stringent way than in California. California’s AB5 bill limited its freelance writers to 35 submissions per client, before they had to become an employee. Fearful of major financial penalties and legal confusion, some companies are telling California writers they can no longer work with them.
And now we see the writing on the wall with the current proposed New Jersey Senate and Assembly bills. There is no 35 submission limit for New Jersey writers (albeit an amount California writers argue is too low). It’s any one job we do for pay.
It’s also not just freelancer writers affected. It’s yoga teachers. Tutors. Graphic designers. AAA roadside service drivers. Truck drivers. Photographers. PR/marketers. A popular transcription company using independent transcribers just told its California freelancers their accounts will be deactivated later this month. “Our unfortunate conclusion is that California is no longer a viable place to do business,” the company told the freelancers. And this week they confirmed that they’re no longer accepting freelance applications in New Jersey, due to “regulatory changes.”
Realtors have been excluded, and I heard through the grapevine that accountants and clergy have too. We are asking that our businesses be treated the same respect – allow us to be self-employed.
Instead, as the both bills are currently written, individuals performing services for pay are classified as employees unless they meet three rules, commonly known as the ABC rules:
- The individual has been and will continue to be free from control or direction over the performance of the service, both under the individual’s contract of service and in fact, AND
- The individual’s service is outside the usual course of the business for which that service is performed, AND
- The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the work performed.
If a publication wants me to write one article, I would have to be an EMPLOYEE. For my media clients, I typically write one to 25 articles a year for each. What company would hire a freelancer as an employee to write one to 25 articles a year? Probably none of them. They would go to freelancers outside of New Jersey to avoid the legal and paperwork hassle.
Many freelancers like me choose to be independent contractors because we want the freedom to work for ourselves. We sell our services to many clients. Under “b” of the ABC rules, I will no longer be able to write a single article for a magazine, newspaper or website without becoming an employee first.
I am already an employee of one communications agency. They hire me on an hourly contract basis for work, and I receive a W2 each year. Getting onboarded with that agency took me at least 3 hours, filling out ridiculous amounts of paperwork, which then had to be processed by their human resources and IT departments. As their employee, I have zero protections. They hire me when they want. I fill out time sheets. I don’t get benefits. I’ve never set foot in their office and I don’t use any of their equipment. How does this benefit New Jersey? How does this benefit me?
I can’t imagine other companies wanting to go through that hassle, when there are plenty of freelancers in other states.
I’ve written for more than two dozen clients this year and will lose many of them if these bills pass and Governor Murphy signs them into law. As an entrepreneur and small business owner, I pay my federal and state taxes. I contribute to the New Jersey coffers. With my income, I help pay for my daughter’s college bill, our mortgage and our high New Jersey property taxes. My ability to do that will be greatly curtailed if New Jersey legislators pass these bills.
These bills have unintended consequences, and are being rushed through the legislature without much apparent thought to entrepreneurs like me who will become road kill. The Assembly bill was introduced on Nov. 7, with a vote scheduled for Nov. 25. The Senate bill was introduced on Nov. 14, scheduled for a vote on December 16. If signed by Governor Murphy, it would go into effect immediately. The bill is intended to protect workers, yet it would literally kill half of my business. For what purpose? To protect me?
In order for freelancers like me to continue making a good living, we need the freedom to work. The law as it’s written does the opposite of protecting my worker rights. It threatens my rights to make a good living. The business I’ve spent 18 years building will be decimated. My clients will not hire me as an employee. They’ll hire out-of-state writers for their freelance work. That doesn’t just hurt me. It hurts New Jersey.
Deborah Abrams Kaplan is a freelance writer in Westfield, New Jersey. She mainly covers supply chain management and medical/health writing for more than two dozen clients inside and outside New Jersey. You can read her work at kaplanink.com and follow her on Twitter at @KaplanInk.