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Concerns raised as California's independent contractor law is set to take effect

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Posted at 10:51 PM, Dec 26, 2019
and last updated 2019-12-27 07:55:37-05

SAN DIEGO (KGTV) -- Some independent contractors are expressing concern that they are losing their livelihood ahead of a controversial new state law meant to protect California workers.

"Whether it was intended or not, this is what's happened," independent contractor Caitlin Healy told 10News. "I've lost my job, basically, overnight, and I don't have a clear path forward."

The law is already facing at least two legal challenges, even before taking effect Jan. 1, 2020.

The law known as Assembly Bill 5, authored by Assemblymember Lorena Gonzalez (D-San Diego), seeks to codify what is known as the Dynamex ruling by the California Supreme Court in 2018.

The court came up with a test to determine whether a worker should be classified as an employee, which makes them eligible for many benefits such as overtime pay and meal breaks, or an independent contractor.

Once introduced in the legislature, the bill sparked a fierce fight. Companies such as Uber and Lyft lobbied heavily against the bill. Protests sprang up both for and against AB5, featuring workers in such disparate fields as rideshare drivers, freelance journalists, truckers, and exotic dancers.

Supporters say the law will protect workers by preventing companies from intentionally misclassifying them to avoid paying benefits. Critics say the law will be a massive and, perhaps, destructive, disruption to the gig economy.

Healy, a Chinese-to-English translator who works with medical documents, said, "It's pretty specialized. Most companies would only need my services maybe once a week, maybe once a month. So, I work for many, many different clients."

She had not heard of AB5 last week when several of her long-term clients emailed her to say they would be ceasing to use her services due to the new law.

"They said that it would reclassify me as an employee, which they can't do, so they'll be sending work to vendors based in other states,” Healy said.

Several industries have exemptions from the new law, which has led to more confusion and concern.

"AB 5 does pick winners and losers," Dan Eaton, legal analyst and instructor at San Diego State University, told 10News. "A lot of these people who are independent contractors are saying wait, we like the arrangement as it stands and what you're doing is you're interfering with our ability to make a living."

Eaton also said it will be interesting to see what happens as the courts weigh in. He also anticipates that the legislature will consider changes to the law.

"Millions of Californians and thousands and thousands of small businesses will be affected," Eaton said.

Gonzalez was not available for an interview by the time this story aired, but she did send 10News a statement: "We expect corporations to abide by California law. It's unfortunate that a few companies may try to evade the law by simply not hiring California translators. We look forward to ensuring AB5 is fully implemented next year, including holding companies accountable for retaliatory hiring practices and clarifying the law for legitimate small businesses, which some translators are.”