The Biden Administration Wants to Inflict AB5 on the Rest of the Country

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The Biden administration wants to inflict AB5 on the rest of the country.  With the PRO act languishing in Congress (and very unlikely to pass), they are turning to the National Labor Relations Board for help.  Over in City Journal, Steven Malanga has written about what attempts are being made. Here’s the racy headline.

Title of Malanga article The Biden Administration Wants to Inflict AB5 on the Rest of the Country

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AB5 has been terrible for California (especially the trucking industry).  The bill effectively outlaws independent contractor status in California.  A recent law created exceptions for certain industries.  Trucking was not included.  Some of the best work on this has been done by Karen Anderson, creator and head honcho of the Facebook group Freelancers Against AB5.  To read personal horror stories, visit Karen’s Facebook page.

I’ll leave it to you to peruse Mr. Malanga’s excellent reporting.  But here’s one example.

Even as the administration was asking the Court not to intervene, the Labor Department began holding “listening” sessions on independent contractor status, in anticipation of issuing a rule that would redefine contractors nationwide in the same way as the California law. 

Though these sessions were not recorded (no transcripts exist of the testimony, according to reporters who have tried to obtain them), they apparently did not go as the administration hoped. Officials probably anticipated that disgruntled employees and union members would show up to testify in favor of stricter rules, but it appears that contractors and their employers, energized by what has happened in California, dominated the sessions, speaking out against any new rules and endorsing the current ones. “Only a handful of people asked the department to change the rule, and most of them weren’t even independent contractors,” the co-founder of a group that opposes changes, Fight for Freelancerssaid. “They were union organizers or union members who wouldn’t be affected by any rule change.” Given that AB5 is now nearly three years old, contractors have plenty of experience with the new, more restrictive standards. They made it plain that they disliked them. “Cautionary tales from California were prevalent,” said the head of a professional association of translators (who tend to work as contractors). Nevertheless, the Labor Department “did not give any indication of any exemptions being contemplated,” she added.

Read it and weep.  I’ve been running my sole proprietorship consulting company since 1975.  This will be the last tax year I file a Schedule C.  I plan to shut the company down (thereby achieving full retirement).

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About Tony Lima

Retired after teaching economics at California State Univ., East Bay (Hayward, CA). Ph.D., economics, Stanford. Also taught MBA finance at the California University of Management and Technology. Occasionally take on a consulting project if it's interesting. Other interests include wine and technology.