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.