Public awareness of what’s been going on is accelerating, changes are accelerating. https://mobile.twitter.com/Incarcerated_ET/status/1205583073229889539
California AB-5 Law
- Thread starter chris f
- Start date
Public awareness of what’s been going on is accelerating, changes are accelerating. https://mobile.twitter.com/Incarcerated_ET/status/1205583073229889539
chris f
Veteran
I'm currently in the middle of educating an out of state client I have on the books for January, I'm trying to get the client (a non-profit that isn't in the business of video production) to allow my crew to all invoice them directly for labor while I figure things out in the meantime, but I'm feeling like there's a 50/50 chance I end up just losing the gig altogether because of this.
On a few economic forums I frequent, one can occasionally find an article addressing the "law of unintended consequences". My reply to them goes something like this, "It implies either benevolence or stupidity or combination thereof".
Rest assured, neither is the case.
mattmealer
Member
Let us know how it goes. I'll probably be in the same situation myself within a month or two as projects start lining up for January and February.
I don't currently do many jobs that require me to hire subcontractors, and now that this law is in place, I'll be doing my best to avoid those altogether, though I may have a couple early next year. Would much rather hire out as an individual freelancer or have my (very small) crews invoice the client directly rather than deal with the new headaches of functioning as a miniature 'production company'.
Run&Gun
Veteran
I couldn't help but see some of the parallels with 'ObamaCare', as I read this. There were several articles written the day after it was signed into law, and I don't recall the specific items, but there were two or three "major selling points"/promises of the ACA that were unenforceable, because it was so poorly written. The insurance companies had already found loopholes on day one that got them out of certain promised coverages.
Of course, this is presuming you believe that any of these were accidental/unintentional...
Lots more is coming.
A) It's an appeals court.
B) It ruled it unconstitutional because it was no longer deemed a tax.
C) The California employment laws are commercial rather private transactions.
I am arguing the law, not ideology behind it. The real motivation of these new laws is the elimination of the independent contractors, consolidation into larger unionized commercial entities and the subsequent control over both. The deal with Lyft and Uber is exactly how it plays out. It's called quid pro quo.
Somehow I got caught blindsided by all this, which is f$cked up considering the news junkie I am... goes to show you how hard it is to find the news that matter in all the algorithm-driven junk. I heard about it a couple times earlier this year, and said "naaahhh, this sound ridiculous". Finally, a close musician friend told me one of her clients (a voice-over company) will stop working with CA talent because of this, and..... yeahhh.
I'm split about it, because much of non-union showbiz employment has been a farce for years. All of us (well, all of us crew
) have been complaining that it's a race to the bottom, that A&E work is being devalued and it's impossible. So how can we say that on one hand, and on the other, complain when we're cleaning house... God forbid, now we'll be entitled to proper overtime, worker's comp, disability insurance, minimum wage...
Also, remember that you pay 15.3% extra in SE tax on your 1099 income, which you don't as an employee, though your bottom line depends on your income and expenses.
That said, it's still a mess. Yes, if you work for a feature film I think this shouldn't be a problem. But some gigs are an integral part of life and culture, and it appears that this law makes gigs all but impossible.. and that's my WTF moment. What's a musician supposed to do, when they need someone to run sound mix for their concert for 3 hours? Anything that's sporadic, anyone who's just starting or is in the process of building their career... And how does this work with post houses?! The law's interpretations I read mean that the colorist is now your employee...
Personally, this time is already "do or die" - despite considerable success in my work, over the past couple of years I lost my 3 main clients (one shut down his company, a second folded out of the US entirely, and a 3rd simply ran out of work to give me, and won't have new work for another 2 years). I've been looking to get into union work, so AB5 makes it all the more obvious that I'll have to do that... or find another career. Also, I provide several types of independent production and post-production services, and love being able to wear a few hats; this is going to make it much harder to do diverse work.
I'm split about it, because much of non-union showbiz employment has been a farce for years. All of us (well, all of us crew
) have been complaining that it's a race to the bottom, that A&E work is being devalued and it's impossible. So how can we say that on one hand, and on the other, complain when we're cleaning house... God forbid, now we'll be entitled to proper overtime, worker's comp, disability insurance, minimum wage... Also, remember that you pay 15.3% extra in SE tax on your 1099 income, which you don't as an employee, though your bottom line depends on your income and expenses.
That said, it's still a mess. Yes, if you work for a feature film I think this shouldn't be a problem. But some gigs are an integral part of life and culture, and it appears that this law makes gigs all but impossible.. and that's my WTF moment. What's a musician supposed to do, when they need someone to run sound mix for their concert for 3 hours? Anything that's sporadic, anyone who's just starting or is in the process of building their career... And how does this work with post houses?! The law's interpretations I read mean that the colorist is now your employee...
Personally, this time is already "do or die" - despite considerable success in my work, over the past couple of years I lost my 3 main clients (one shut down his company, a second folded out of the US entirely, and a 3rd simply ran out of work to give me, and won't have new work for another 2 years). I've been looking to get into union work, so AB5 makes it all the more obvious that I'll have to do that... or find another career. Also, I provide several types of independent production and post-production services, and love being able to wear a few hats; this is going to make it much harder to do diverse work.
Run&Gun
Veteran
Yes, I agree. It’s all about keeping everyone they can under their thumb. Again, trying to avoid the political aspect as much as possible, but it’s the same reason that a certain group wants everyone on welfare, as much as possible. Control. It keeps them under their thumb and also makes them beholden to them(i.e: votes).
Run&Gun
Veteran
If only it would actually work that way. But as you’ve seen, the corporations will just not do business with you anymore. As I posted earlier, I have a client that slapped a cap on the days we could work for them to avoid us being classified as employees by the IRS(still have my doubts about it after numerous conversations with my accountant and others in my same position who have had conversations with lawyers over it). And again, the ironic thing, I pay probably half the amount of taxes I used to, because of the amount of days that they “can” hire me, now.
puredrifting
Major Contributor
Revenue for the State versus pesky lawsuits. If history is any indicator, this will stand, without a doubt. The State will not be denied additional revenue.
Any chatter from legislators that contain the phrases, "protecting workers", "For the good of workers" is all utter BS nonsense. California has a record of
screwing over their own citizens so AB5 is just the latest incarnation of that decades long maxim.
Decimating our industry isn't surprising, they already did it with runaway production that mainly had its origins in California.
puredrifting
Major Contributor
Guaranteed that we will all lose a LOT of business over this. This is what the State of California does.
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Batutta
Major Contributor
I have found very little information about how this effects freelance editors. I'm fairly certain my business passes the ABC test, and the bulk of my work is trailers which I believe falls under the marketing professionals exemption but, it's all rather vague. There is an exemption for "editors" but I'm pretty sure they meant print editors. Also, I live and work in Canada, but most of my clients are from California so I have no idea how this applies to me, if at all.
You'll be the main beneficiary! (hah, rim shot)
PS. When the Hollywood execs blame the "runaway production", as it's called, on the exchange rates, it's a POS argument. Actual decisions are all based on relative costs, which depend on a bunch of variables.
PPS. "Overtime" wages don't exist. It's all figured into a total compensation package, medical and SSI included.
Run&Gun
Veteran
Again, the ironic thing is, there will be less revenue collected, because people will be working less, because the corporations and businesses will not shoulder the added burdens. The state will just have less tax dollars coming in, residents will leave the state and there will probably be more people needing financial assistance(i.e: welfare, etc.), because they can no longer be fully self sufficient with the loss of income.
Pretty soon everyone will just be given aptitude tests as they enter school and assigned a job and trained for it and that's what they will do for their life. There will be government run healthcare, everyone will be paid a fixed "salary" and that will be their life until they die. Their government owned "apartment" will be hosed out and someone else will be moved in. Wash, rinse, repeat.
We were certainly heading that way, however that’s never going to happen. The public marker that will indicate significant positive changes are coming are the forthcoming indictments of top players in this game.
Thoughts become things- imagine and talk about what you’d like to see vs. the opposite.
Many of the sports TV companies have already been doing this, ESPN being one I know by name. Some of the smaller groups still treat you as an independent contractor like the DAZN boxing I did last Spring. So nothing new to me in my world. Truthfully I'd welcome every company taking taxes out and sending a w2, this 1099 crap is nothing but headache.
Sounds like California is just taking this to the next logical step to make certain that taxes are withheld from every employee, in or out of state.
I can also see that guys running small production companies are going to have a hard time dealing with this. I hope there is decent software that doesn't cost a fortune to help you comply.
Sounds like California is just taking this to the next logical step to make certain that taxes are withheld from every employee, in or out of state.
I can also see that guys running small production companies are going to have a hard time dealing with this. I hope there is decent software that doesn't cost a fortune to help you comply.
puredrifting
Major Contributor
For me, it really just comes down to what the market will bear. I had two clients this year that willingly paid the 32% bump to have me hire a payroll company.
For the smaller projects where I would typically hire a 3-5 person crew, that work will probably evaporate. The clients who won't do that will not hire me or
anyone else and that will be lost revenue for me, the state and the Feds. How many business, with one stroke of a pen, instantly have to raise rates 32% for
clients while losing more money for all of the free labor they will have to put into the producing chores with the paperwork, record keeping, research and liability burden?
This is how you destroy an industry or at least a good portion of it.
For the smaller projects where I would typically hire a 3-5 person crew, that work will probably evaporate. The clients who won't do that will not hire me or
anyone else and that will be lost revenue for me, the state and the Feds. How many business, with one stroke of a pen, instantly have to raise rates 32% for
clients while losing more money for all of the free labor they will have to put into the producing chores with the paperwork, record keeping, research and liability burden?
This is how you destroy an industry or at least a good portion of it.
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