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California’s Gig Economy Law Threatens Local Musicians, Performing Arts

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California has overreached in its effort to address the challenges in today’s tech platform gig-work economy. 

The live music sector, the progenitor of the term “gig” work, is being swept up by this law. The irony would be comical if it were not such a serious problem.

There are some worthy arguments to be made for Assembly Bill 5 by Assemblywoman Lorena Gonzalez, San Diego Democrat.

It could improve the lot of workers trying to piece together a living in this expensive state. It should help capture unemployment taxes from unscrupulous employers misclassifying workers as independent contractors. 

However, the law has created a tangle of red-tape and administrative expense for large portions of California’s cultural sector.

To illustrate: In 2019, San Jose Jazz presented more than 1,000 musicians across 326 different performances. The vast majority were independent musicians and singers from California, the nation, and around the world. 

The U.S. Bureau of Labor Statistics defines musicians under code, 27-2042 Musicians and Singers. This is distinct from the category for Fine Artists, 27-1013 Fine Artists Including Painters, Sculptors, and Illustrators. 

For some big name acts, we contract with their corporate agent and pay the agency for the band’s performance. However, for most musicians, we work directly with the band leader to agree on a price and terms, providing them payment as independent contractors. They, in turn, pay their band members in accordance with IRS Schedule C filing rules.

Under AB 5, we will be required to inform all U.S.-based musicians that they must now become employees of San Jose Jazz, or incorporate themselves before they will be allowed to perform for us. 

If band leaders choose to pursue incorporation, they will then need to take on the responsibility of payroll and HR administration for the rest of their band.

In many performing arts disciplines, such as jazz, musicians are constantly reconfiguring line ups, performing as sidemen in various bands, and as one-time special guests for specific performances. 

We will now be obliged to devote tremendous time and resources to constantly hiring, managing and tracking of musicians through this cumbersome process. 

AB 5 unnecessarily complicates other work arrangements found in community cultural programming such as small festivals, neighborhood street fairs, parades and summer music series in our local parks. 

San Jose Jazz is best known for producing our large Summer Fest which brings tens of thousands of visitors and requires hundreds of temporary roles to execute. 

The vast majority of previously contract work roles will now be required to be employees. 

For instance, we are required by the City of San Jose to hire off-duty police officers through their Secondary Employment Unit program to insure a safe and well-run festival. Under AB 5 we will be required to classify these moonlighting officers as San Jose Jazz employees with the attendant oversight and administrative requirements. 

Typical of such legislation, AB 5 comes with a hefty list of exempted categories that are a Who’s Who of the politically connected and well-funded: lawyers, doctors, accountants, brokers, builders, and others. 

Actors, choreographers, dancers, directors, producers, and musicians are among numerous roles in the performing arts that exhibit a multitude of contract work arrangements. None of these are exempt from AB 5’s rules. 

The cultural sector is full of various work arrangements, some as employee others as contractor, that have evolved over decades to accommodate artist’s unique crafts and artistic products and services. AB 5 runs roughshod over all of these arrangements.

Beyond the financial, legal, and administrative mess created by AB 5, communities face even more profound threats from the new law. Segments of our cultural and civic life are at risk of going out of existence. 

Non-equity theaters, music venues and jazz clubs, dance companies, small cultural festivals of all types face very real threats to how they organize their work arrangements.

The cavalier approach by which Sacramento adopted this legislation opened a Pandora’s box that will chip away at California’s cultural life. 

Perhaps our legislators will begin realizing the implications of AB 5 when they start organizing and staffing their next campaign or political rally, and find that they, too, must deal with the mess they created.

Brendan Rawson is the executive director of San Jose Jazzbrendanr@sanjosejazz.org. He wrote this commentary for CalMatters.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics. Comstock’s is a CalMatters media partner.​



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Economy

Performance Management in the Gig Economy

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Unlike the remote employee who operates in the gig economy, many employees working in traditional settings, and annual performance reviews are a normal part of their work-life as coffee breaks and paid time off. However, these annual performance reviews have proven to be highly ineffective and painful for both managers and employees. 

Performance management in the gig economy is worlds different than performance reviews. It includes making your employees feel included, giving recognition, and encouraging open discussions, among other things. 

As a result, many companies are slowly replacing them with other forms of performance assessment, such as regular employee feedback. According to The Washington Post, roughly 10% of Fortune 500 companies have abandoned annual performance reviews.

But there’s one group of employees who don’t benefit from either annual performance reviews and regular feedback. They’re the gig workers or the independent contractors who work on side gigs. 

If once the term “gig” was associated with jazz musicians, today, that term is used to describe external professionals across all industries, such as software engineering, graphic design, SEO specialists, and more. 

Estimations tell that roughly 150 million workers in North America and Western Europe have quit their 9-to-5 lives to join the gig economy

The tech giant Microsoft, for example, has two-thirds as many contractors as employees. Uber, the ride-hailing company, has 160,000…

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An official crusade against Prop. 22, the gig workers measure

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Reasonable people can disagree whether the business model of Uber, Lyft and other transportation services is a model of flexible part-time work or cruelly exploits non-employee workers.

Their drivers, often using their own vehicles, are paid by the ride, giving rise to the term “gig economy.”

Uber, et al, contend that they give drivers opportunities to voluntarily supplement their incomes by working whenever it suits them. It’s not uncommon for someone to simultaneously drive for both Uber and Lyft.

The model, however, is unsettling to unions and their political allies, who contend that it deprives gig workers of rights and benefits of being on the payroll, such as contributions for Social Security and Medicare benefits and overtime pay. As independent contractors, gig workers also cannot be union members.

Two years ago, the state Supreme Court essentially declared gig work to be an illegal misclassification and the Legislature followed up with a hotly contested measure, Assembly Bill 5, that put the decision into law with very few exceptions.

Uber, et al, responded with a ballot measure that would exempt them from the legislation while offering gig workers some employee-like benefits.

Ostensibly, then, voters will decide whether gig work is an appropriate new model or an abomination when they either pass or reject Proposition 22.

However, the anti-Proposition 22 coalition — unions and their political allies — is not content to just let voters decide, but is waging an all-out pre-election crusade through official channels, essentially inserting government into a political campaign.

Attorney General Xavier Becerra signaled pre-campaign hostilities by giving Proposition 22 a slanted official title: “Exempts app-based transportation and delivery companies from providing employee benefits to certain drivers.”

It closely mirrors the anti-Proposition 22 campaign theme and the companies challenged it in court, only to lose as judges affirmed Becerra’s wide discretion to write ballot measure summaries.

Becerra and some city attorneys also sued Uber and Lyft for continuing to classify their drivers as independent contractors despite the passage of AB 5 and this week, San Francisco Superior Court Judge Ethan Schulman ruled against the companies.

Schulman said the companies’ employment practices are depriving drivers “of the panoply of basic rights to which employees are entitled under California law.”

“Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities,” Becerra said in a statement. “We’re going to keep working to make sure Uber and Lyft play by the rules.”

“The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law,” Uber spokesperson Davis White said in a statement.

A few days earlier, state Labor Commissioner Lilia Garcia-Brower sued Uber and Lyft to recover back wages for drivers that allegedly had been cheated out of pay by misclassification, thus inserting Gov. Gavin Newsom’s administration into the pre-Proposition 22 drive.

Finally, the author of AB 5, Assemblywoman Lorena Gonzalez, a San Diego Democrat, has proposed another crackdown in a new bill.

Assembly Bill 1066 would allow the Department of Employment Development to delegate collection of unemployment insurance payroll taxes to Becerra’s office. It specifically mentions going after companies using “misclassified independent contractors.”

The battle that pits the gig worker companies against unions and Democratic politicians began when the state’s economy was booming. In the throes of deep recession, Proposition 22’s fate may hinge on whether voters perceive gig work as a lifeline for the unemployed or see gig companies as part of the economic problem.

Dan Walters is a CalMatters columnist.

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California’s crusade against the gig economy and Prop. 22 – Daily News

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Reasonable people can disagree whether the business model of Uber, Lyft and other transportation services is a model of flexible part-time work or cruelly exploits non-employee workers.

Their drivers, often using their own vehicles, are paid by the ride, giving rise to the term “gig economy.”

Uber, et al, contend that they give drivers opportunities to voluntarily supplement their incomes by working whenever it suits them. It’s not uncommon for someone to simultaneously drive for both Uber and Lyft.

The model, however, is unsettling to unions and their political allies, who contend that it deprives gig workers of rights and benefits of being on the payroll, such as contributions for Social Security and Medicare benefits and overtime pay. As independent contractors, gig workers also cannot be union members.

Two years ago, the state Supreme Court essentially declared gig work to be an illegal misclassification and the Legislature followed up with a hotly contested measure, Assembly Bill 5, that put the decision into law with very few exceptions.

Uber, et al, responded with a ballot measure that would exempt them from the legislation while offering gig workers some employee-like benefits.

Ostensibly, then, voters will decide whether gig work is an appropriate new model or an abomination when they either pass or reject Proposition 22.

However, the anti-Proposition 22 coalition — unions and their political allies — is not content to just let voters decide, but is waging an all-out pre-election crusade through official channels, essentially inserting government into a political campaign.

Attorney General Xavier Becerra signaled pre-campaign hostilities by giving Proposition 22 a slanted official title: “Exempts app-based transportation and delivery companies from providing employee benefits to certain drivers.”

It closely mirrors the anti-Proposition 22 campaign theme and the companies challenged it in court, only to lose as judges affirmed Becerra’s wide discretion to write ballot measure summaries.

Becerra and some city attorneys also sued Uber and Lyft for continuing to classify their drivers as independent contractors despite the passage of AB 5 and this week, San Francisco Superior Court Judge Ethan Schulman ruled against the companies.

Schulman said the companies’ employment practices are depriving drivers “of the panoply of basic rights to which employees are entitled under California law.”

“Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities,” Becerra said in a statement. “We’re going to keep working to make sure Uber and Lyft play by the rules.”

“The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law,” Uber spokesperson Davis White said in a statement.

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