What’s Next for ‘Gig Workers’ Under AB5 After Passage of Prop 22?

LOS ANGELES—The controversial California “gig worker” law known as AB5 was weakened again last month, when the state’s voters resoundingly approved ballot Proposition 22 by a 17-point margin in last month’s general election. The AB5 law requires employers in a number of industries to subject their workers to a strict test, to determine whether they can work as “independent contractors,” or must be hired as employees. The law appeared to, potentially, have a direct impact on the adult industry, where most performers and crew work on a “gig” basis — that is, as independent contractors who collect a fee for their work on a piecemeal basis, but otherwise have no ties to the companies that hire them. But the law was aimed largely at rideshare companies — Uber and Lyft, in particular, as well as delivery companies such as GrubHub and DoorDash. As a result, Prop 22 appears to have little effect on the adult industry, according to Free Speech Coalition spokesperson Mike Stabile. “From what I can gather, there's no real change in guidance following Prop 22,” he told AVN. “The law was written fairly narrowly to apply to app-based rideshare and delivery, and has little to no effect on adult. If there's another interpretation that people are giving, I'd be interested to hear it.” The FSC has “been opposed to the law as it relates to the adult industry. It doesn’t take into account the fact that most performers and crew are small business owners, and operate numerous income streams, from clips and cams to content trades and studio work,” Stabile told AVN in an earlier statement. But one way that Prop 22 could remove any possible confusion over whether adult industry workers may be independent contractors or employees is if the ballot measure leads to AB5’s full repeal. Under Prop 22, which is slated to take effect on December 17, those rideshare and delivery companies will now be exempt from the AB5 requirements, which would have compelled the companies to hire drivers as employees, complete with benefits, health coverage, tax withholding and all of the other protections and burdens than come with full-time or even part-time employment.  With those major industry exemptions, on top of the 50 exemptions included in the original AB5 legislation — which took effect on January 1 of this year — and another 15 carved out in a successor bill, AB2257 which passed in September, the exemption for the rideshare and delivery industries now means that the “gig worker” law simply doesn’t apply to 67 types of workers, whole still affecting workers and employers in other industries. As AVN reported, opponents of AB5 anticipated that carving out the rideshare companies from AB5’s requirements would be a death blow to AB5, taking away ostensible main reason that the law was authored and passed in the first place. “At that point their targets will be out if it, and they will just be meaninglessly oppressing folks in hundreds of other professions, who aren’t part of big companies or anything like that,”  Sacramento-area Republican Assemblymember Kevin Kiley told AVN in an interview. Kiley has led so-far unsuccessful efforts in the state legislature to repeal AB5. AB2257, contains an exemption for “performance artists” that might apply to adult performers, though exactly how remains unclear. “AB2257's performance artist exception would seem to apply most clearly to cam models,” Stabile told AVN. “Other adult production could potentially fall within that as well, but would likely depend on the specifics of that production.” Despite the passage of Prop 22, AB5 shows no signs of fading away — and no signs of becoming less controversial. In November, a group of business franchise owners — including the Dunkin Donuts and Supercuts Franchisee Associations, as well as the Asian-American Hotel Owners Association and others — filed a lawsuit in federal court to prevent the state from enforcing AB5’s employee-or-contractor test, known as the ABC Test, on franchised businesses.  "AB 5’s misapplication of the ‘ABC test’ to franchising is destructive for franchised brands and fails to understand the most basic aspects of the franchised business model,” International Franchise Association CEO Robert Cresanti explained in a statement. Forcing franchises to apply the ABC Test would undermine the “consistency and uniformity” that must apply to individually owned businesses in a chain, the lawsuit contends. A coalition of social justice organizations also backed Prop 22, including the NAACP, and California Black Chamber of Commerce. In a statement urging passage of the ballot measure, the groups said that gig work for the online platforms “provides an accessible, low barrier-to-entry way to earn income for those who often find traditional employment challenging – communities of color, seniors, disabled veterans and those formerly incarcerated.” At the same time, the restrictive “test” provisions in AB5 may soon go national, which could be a blow for gig workers, including some categories of adult industry workers, nationwide. President-elect Joe Biden publicly opposed Prop 22. Even though California voted overwhelmingly for Biden in the presidential race, giving him a whopping 30-point win, 64-34, the state’s voters ignored his advice on Prop 22, passing the new law 59-41.  But Biden also made support for the proposed federal Protecting the Right to Organize (PRO) Act a part of his campaign platform. The PRO Act would “fundamentally alter federal labor law by dramatically tilting the playing field in favor of labor unions at the expense of employers and employees,” according to a National Law Review report. And one of the provisions of the law designed to do that would be to “make California’s AB5 the law of the land.” The PRO Act, which passed the Democratically controlled House of Representatives in February but has yet to be acted upon in the Senate, would extend the “ABC Test” requirements in AB5 to every state in the country — and at least in its current form, without the dozens of exemptions now baked into California’s application of the law. The PRO Act, opponents fear, would crush the “gig economy” throughout the United States. In California alone, Uber claimed that it would have been forced to eliminate 76 percent of its drivers had the law failed to pass.  According to an analysis by the benefits industry trade publication Benefits Pro, the gig economy has moved to fast for legislators to keep pace, and one, blanket law such as AB5 or the PRO Act fails to consider that gig workers fall into a wide variety of categories, each with individualized needs. “An Uber driver earning $20 an hour will need a much more robust safety blanket than a data scientist earning $350 an hour, and is exactly why different structures should apply,” wrote Benefits Pro reporter Shahar Erez. “As the legal challenges over AB-5 show, labor laws were not prepared for the gig economy,” added Joel Feldman, of the San Diego-based business law firm Slate Law Group. “Current regulations did not anticipate the use of independent contractors in such a way and at such a large scale.” Photo By Dllu / Wikimedia Commons