Lorena Gonzalez (D-80) hosted a pro-Warren campaign event in San Diego on Saturday night. The main event was an appearance by former presidential candidate Julian Castro, but the elephant in the room was AB5.
Anti-AB5 activists weren't about to let the occasion pass by without making their presence known and their voices heard. A determined group of freelancers and artists showed up with signs and waited for the disgraced assemblywoman to take the stage. When she did, they let loose, holding signs and chanting "Repeal AB5!" loudly. Those in attendance said the commotion clearly affected Gonzalez as she realized what was happening. However, instead of pausing, recognizing the protesters or otherwise working to calm the situation, Gonzalez fell into a now all-too familiar pattern...she got vulgar.
With children and families present, the San Diego representative began a chant of her own..."F**k Trump!" Perhaps it was all she could think to say or perhaps she thought she could rally her supporters with some "red meat" and drown out the protesters asking to be freed from her horrendous legislation. Whatever the case may be, the chants for repeal got louder. Here's how Alitzah Wiener-Dallas described it in the public Facebook group "Freelancers Against AB5":
You can follow this link to see the live streaming video one kind protester provided.
Gonzalez' response is indicative of how she views her constituents - as serfs and pawns. A true politician would have at the very least waited for the crowd to grow quiet or responded with some diplomatic (if not disingenuous) platitudes. The assemblywoman is so entrenched in her personal point of view and so beholden to her powerful donors that she felt no shame at all getting completely vulgar at a family event meant to highlight a woman who is running to be the first female president of the United States. Not exactly a ringing endorsement.
*Head to ab5facts.com for voter guides, press and media and other resources. The bill to repeal AB5 (AB1928) will be heard this coming Thursday - that is, if the committee chair allows it to be heard on the floor at all. Call your reps and ask that they hear and pass AB1928 and join the Facebook groupFreelancers Against AB5 for more stories and information.
Tuesday, February 18 (tonight!) there will be a "Repeal AB5" concert at Whiskey A Go-Go beginning at 8 p.m. There will be a free concert and professionals available to help answer questions about AB5. If you're in the area of the famous West Hollywood venue, pop in and lend your support (and voice) to the fight to save California's arts and freelancing industries from this horrific new law.
And special thanks to actor and comedian Hal Sparks for standing up and shouting out. We need more voices like his in this fight.
*follow our Twitter account @ab5of to keep up on all the stories and events surrounding AB5
by Sara Kustiner Pedri (originally posted to Freelancers Against AB5 Facebook group)
AN OPEN LETTER TO DEMOCRATS IN THE CALIFORNIA STATE ASSEMBLY, SENATE AND GOVERNOR'S MANSION: WHAT WERE YOU THINKING?
Congratulations, California Democrats! You’ve successfully scared the holy bejeezus out of all California companies. Now, let’s talk.
In Marvel Universe terms, you’re Tony Stark. You tried to do something to protect everyone, but you created Ultron. Now, it’s time for a Vision.
It’s been 6 weeks since AB5 was signed and put into effect. We’ve now had 6 weeks to see some actual results. So, as a CPA with clients in the Independent Contractor world, and as a lifelong Democrat whose Assemblyperson and Governor actually voted for this shitshow that is AB5, I need to ask: What were you thinking?
After reading the actual law, listening to interviews, and taking numerous courses on AB5, I simply don’t know what the thought process was behind AB5. What was the goal? Because, if it was to “protect California workers”, you’ve done an abysmal job of that.
And if the ultimate nefarious goal was to have everyone join a union, then I have to ask: who was the genius who 1) didn’t consider that the result of AB5 would include dog walkers needing a union, and 2) then thought, “Hey, we need to make an exemption for dog walkers now!” Seriously. There is a line item in a California Labor Law that specifically states “dog walkers”? Ok, which one of you legislators has dogs that need walking? Because that’s like Internal Revenue Code laws that take effect on some arbitrary date like May 23, 1976, because some politician or lobbyist somewhere did something on May 22.
For the most part, the laws were already on the books before AB5.
a) Some companies were misclassifying workers. True. But the Borello Test was on the books. Catch them; don’t punish everyone for their misdeeds. You’ve increased the EDD funding budget for audits now – you could have done that before.
b) California has had a law for years that states that companies must cover independent contractors with Workers’ Comp Insurance. Sorry, Senator Warren – I love you, but you’ve got that one wrong. It’s right there on the back of my State Comp Insurance Fund report. Of course, these W/C insurance companies may not have been paying out CLAIMS to independent contractors, but you realize that you should be going after the W/C insurance companies who took premiums but didn’t pay out, right?
c) If you think these workers will now be covered by health insurance, you’re nuts. These ICs can work 50-100 different gigs in a good year. Did you really think they were going to change their health insurance coverage every time they picked up a new gig? I’ve got news for you. Switching health insurance when going from one long-term employment job to another long-term employment job is hard enough – COBRA, anyone? Employer-provided health insurance is NOT going to happen under AB5. Period. End of discussion.
d) Minimum wage protection? You must be joking. Some of the professionals caught up in this make $300-1,500 a day.
The laws were there. You just needed to enforce them. Instead, you took a single legal case, Dynamex (where one single company decided to break the rules and throw all their employees to IC status), and you brought the hammer down. On everyone. You have decided to ruin the livelihoods of 1-2 million true California independent contractors because someone somewhere screwed up on, what, 1,000 classifications? That’s some serious overreaction and, might I add, a rather large amount of California citizens to consider acceptable collateral damage.
Let’s now talk about the known, proven effects so far. And, yes, they significantly disagree with Assemblywoman Lorena Gonzalez’s reporting.
I myself, being naïve, was anticipating that my clients would now be receiving W-2s instead of 1099s, which is a huge problem in itself. AB5 has caused so much fear that hiring companies are now refusing to accept a W-9 with the legal name and tax ID of a legitimate LLC / partnership / S-corp / C-corp and are forcing these freelancers to provide a W-4 and go on payroll, even though they fulfill the exemption of Business-to-Business Contractors and the Borello test.
You see, hiring companies aren’t going to the trouble of figuring out who is who. Everyone has become an employee – even legitimate businesses. These freelancers have operated as true businesses for years with business licenses, workers’ comp insurance for their own subcontractors (if any) as required by law, filing of 1096 and 1099s and DE-542s, paying unsecured business property taxes, etc. They also make large tax-deductible investments in their own equipment, tools, and work spaces.
Forced to be employees, they now will receive W-2 income rather than Form 1099 income, and they will have no ability to deduct their business expenses related to any W-2 income. If they are Schedule C single-member disregarded entities, the Tax Cuts and Jobs Act of 2017 removed their ability to deduct unreimbursed employee business expenses on Schedule A. As such, their Schedule Cs will begin to run net losses, winding up with seeming Hobby Losses which are disallowed by the IRS and FTB. I can assure you these aren’t hobbies; they are livelihoods. If they are partnerships or S-corps, there will no longer be any Form 1065 or 1120S income, but their tax returns will continue to deduct business expenses, creating ongoing losses. Do you know how many years a Form 1065 or 1120S can issue K-1s with ordinary businesses losses before the IRS starts asking questions? Asking for a friend.
By the way, with these losses you’ve created, you’ve just removed the TCJA Federal income tax benefit of the Qualified Business Income Deduction, because without net business income, there’s no deduction.
In other words, AB5 will put these professionals out of business and they will close their LLCs, partnerships, and corporations. And it won’t be because of the expense of payroll taxes. It will be because they can no longer operate the businesses they previously legally established due to not receiving payment/income in the form necessary for proper tax reporting purposes.
It has turned their income tax and business worlds upside down. But I was naïve. AB5 has resulted in far worse than that.
Instead of switching ICs to employees, many hiring companies have simply cancelled contracts. Period. Done. Work gone. Needless to say, that sound you heard was 1 million independent contractors finding out they no longer have a source of income.
And who’s getting these jobs? OUT-OF-STATE employees, because, lo and behold, your little AB5 states that California companies who hire out-of-state ICs aren’t affected by AB5.
So, you’ve successfully 1) forced ICs to move out of state for work, and 2) allowed CA companies to hire out-of-state workers. Brilliant! You just took an entire demographic of mostly Democratic voters and MOVED them out of California! Tell me, who exactly are your political advisors? Because I want to make sure I do NOT hire them.
And, lastly, as a CPA, you’ve tied my hands. I can’t even assist my clients in attempting to make a proper determination, because I am “jointly and severally” liable for any penalties ($5,000-$15,000 fine PER individual misclassification). Only a member of the bar can advise a business owner about classifying workers as employees or ICs. Guess what? Attorneys are booked up three months out. I guess that benefits you the most, as it’s difficult to find an available attorney to write up a class-action lawsuit against you.
In summary, let me say that I hate… HATE… giving the GOP any talking points. But, California Democrats, you have brought this on yourselves. Now, fix it!
by Jessica Tucker
To my new and unexpected friends:
As a person who has been in the AB5 fight for quite awhile, I would like to share something with you. For months, as I’ve read through stories and commentary of those affected by AB5, I noticed more and more despair, sadness, and hopelessness. As our incomes were lost, our bills came due, and businesses began to be fined retroactively for this egregious law, the sense of defeat has piled up. As lawmakers stonewalled us, the media froze us out, and we were told there would be no relief, our panic set in. But, friends, I would like to present you some hope.
I have never once doubted that we will win this fight. I have never despaired or lost hope. I have never felt defeated. In fact, I feel that we’ve already won. Let me tell you why.
As more and more evidence has come to light, we have clearly exposed the people and intentions behind AB5. This is not a partisan issue, and it’s not even an issue that has two equally valid sides for or against the law. There is one side that is fair and just, and one side only. There is one side with truth. We stand on the right side of justice. We have the foundation of Truth, and nothing can stand against the truth.
Many have compared this fight to David and Goliath. We all know who won that fight. Why did David win? Though he was smaller and "weaker", he was smart, determined, and stood on the foundation of goodness. Evil never triumphs over Good. Evil may rule for awhile, but it has never been ultimately victorious even once in human history. Because we stand on the side of Good, we have already won.
The fight will be hard and may be long. Many of us will suffer a great deal under this oppression. But we must continue to fight. Bad guys only win when the good guys give up. The only way for evil to be victorious is for the good to stop fighting. If the good stay and fight, the good will always win.
This law may be a blessing in disguise. How long has this corruption gone on? How much further do they intend to take it? They have hit us with AB5 at the perfect moment...for us. Why? We have a rare opportunity here to clean out corruption and start fresh. These lawmakers exposed themselves right before an election. Anyone supporting this law wears a badge of corruption. It is an easy way for us to tell who is working against our interests. We can take this opportunity to clean out our government. Never has it been easier to spot the rats and clear them out. This single issue has exposed corruption even up to the national level. How easy it is to spot these people now! If not for AB5, they would have ruled for many more years!
We have two paths to victory. Either we get an immediate repeal and then vote them all out, or we vote them all out and then get a repeal. The only path to defeat is if we give up.
There are nearly 40 million people in California. An estimated ⅓ of those do some type of independent contracting work. That is over 10 million people affected by AB5. This movement against AB5 that we’re a part of right now...this is only the beginning. We are the first group in a chorus of voices that will rise up against this oppression in the coming weeks. We are not alone. We are the front lines, and there are millions behind us.
We are a free people. Our public servants have no ultimate power over us. They have a false sense of control over our lives. This is their fatal flaw. We elected them to a human institution to govern with human laws. But our freedom doesn’t come from human institutions. We are born free from the control of others. We do not have to submit to their false sense of control. This right to personal freedom was not given to us; we were born with this right.
Take heart. Be brave. If we continue to fight, then we have already won. Stand on your Truth, unwavering, dignified, sure and confident. Do not beg and plead, speak with desperation, show sadness, or feel frustration. You are on a solid foundation of Truth, with countless people standing with you. That is all you need to win.
Your Brother/Sister in Freedom
PRESS RELEASE : ACTION ALERT
Coalition Against AB5 (CAAB)
Contact: Kira Davis email@example.com
Twitter: @RealKiraDavis @Ab5of
February 12, 2020
Assemblyman Kevin Kiley (CA-6) has sponsored an assembly bill that will fully repeal the horrific AB5 and restore the rights of independent contractors to work freely. AB1928 faces many challenges as it weaves its way through the capitol, not the least is which the hesitancy of many entrenched representatives to go against the “status quo” of Sacramento politics. However, Kiley has indicated that he’s secured a commitment to have AB1928 out of “rules this Friday and referred to a policy committee”.
In a statement to our Coalition Against AB5, Kiley urged voters and constituents to continue to call and email their representatives and ask them to co-sponsor AB1928.
“Thanks to thousands of Californians making their voices heard, momentum is building to repeal AB 5 and restore the Right to Earn a Living. It is vital that we keep up the pressure. Please stay in frequent contact with your Assemblymember and Senator, urging them to co-author AB 1928 and support its passage.”
AB1928 is a bill that can be signed and enacted as soon as it reaches Governor Newsom’s desk. It does not require independent contractors to continue waiting as their income dries up and they are faced with leaving the state. This bill would mean immediate relief.
While we at CAAB understand that full repeal is a tall order given the current climate inside the halls of our state capitol, we also recognize that nothing short of a full repeal will be justice. All Californians deserve justice, not the chosen few who receive special carve-outs…carve-outs which will only leave them at the mercy of the state moving forward.
We are asking all concerned parties to immediately call or email your representative, tell them you need immediate relief from AB5 and ask them to kindly co-sponsor AB1928 and expedite it’s passage.
Your voices and your votes are the most powerful weapons you have. Now is the time to exercise those weapons without abandon. Our very livelihoods depend on it.
Click here to find your representative http://findyourrep.legislature.ca.gov/
Navigate to AB5facts.com for more action items, information and resources.
Follow @AB5of on Twitter.
*.pdf version of press release available here
by: Peter G. Kavilas
The ABC test is NOT, newly created for, from the DYNAMEX Court case as Lorena has been quoted in several articles. This test has already been in use in very particular circumstances in several states and as early as the 1937.
The test was created in 1937, a time when there was no internet, most women did not work outside the home, and there were far fewer options for earning a living during the Great Depression.
LINK here: https://www.insidernj.com/press-release/entrepreneurs-unite-vs-democrat-backed-legislation-that-attacks-careers-of-women-mothers-who-choose-to-work-for-themselves/
The “ABC” test is fundamentally flawed. It creates two new categories of “statutory employees” that deny independent-contractor status to large swaths of independent entrepreneurs. It harshly infringes on the rights of those who choose to offer their services as independent entrepreneurs and poses a clear and present threat to business innovation and efficiency. According to a 2010 study by Ph.D. economist Jeffrey A. Eisenach, “[p]olicy changes that curtail independent contracting … would result in higher unemployment, slower economic growth and reduced economic welfare.” The study also notes that curtailing independent contracting would
Politicians should not be allowed to distort and abuse such devices
Where is the institutional OVERSIGHT? How does this stuff even happen?
The US Bureau of Labor Statistics CONFIRMS Independent Contractors Prefer IC Status -More FACTS Lorena Gonzalez Didn't Bother Researching
by Peter G. Kalivas
Feel Free to read this 2018 info from the US Bureau of Labor (FEDERAL) Link: https://www.bls.gov/news.release/conemp.nr0.htm
Independent contractors were more likely than those in traditional arrangements to be in management, business, and financial operations occupations; sales and related occupations; and construction and extraction occupations.
Independent contractors overwhelmingly prefer their work arrangement (79 percent) to traditional jobs.
Fewer than 1 in 10 independent contractors would prefer a traditional work arrangement. (See table 11.)
Benefits of Contingent (Temp, Independent Contractors) Workers Contingent wage and salary workers were half as likely to be covered by employer-provided health insurance as non-contingent workers (full time employees).
One-fourth of contingent, IC workers had employer-provided health insurance in May 2017.
Although most contingent workers did not receive health insurance from their jobs, a substantial share--3 in 4--had health insurance from some source, including coverage from another family member's policy, through a government program, or by purchasing it on their own.
YOU GUYS, this EFFORT to REPEAL AB5 is NOT OVER, we must NOT STOP.
If the REPEAL Fails then we must support the ballot in NOVEMBER with the public vote.
I get it, we have to work, make money, etc. This took me 5 minutes to research and disperse. KNOWLEDGE is POWER, facts are our friends.
US Bureau of Labor Statistics
We're a loose coalition of freelancers and independent contractors trying to centralize information about AB5 and empower ICs across the state to fight for their livelihoods. We tell stories and make plans.
For press and inquiries contact Kira Davis firstname.lastname@example.org