AB 2257 Amends AB 5; Impacts Freelance Musicians

AB 2257 Amends AB 5; Impacts Freelance Musicians

The primary legislative vehicle for amendments to Assembly Bill 5 (AB 5), Assembly Bill 2257 authored by Assembly member Lorena Gonzalez (D-San Diego), cleared the California State Legislature on August 31 – the last day of the legislative session. The bill now moves to the Governor’s desk. Gov. Newsom is expected to sign the measure, and once signed, the bill’s provisions will be effective immediately.

The legislation is a “clean up” bill for AB 5, the law enacted on January 1, 2020, that is intended to address the misclassification of workers as independent contractors. The criteria under AB 5 imposes a new, stringent three-part test (the “ABC” test) to determine whether a worker is to be treated as an independent contractor or employee. Because of the sweeping nature of the AB 5, many freelancers, consultants, and others unexpectedly fell under the new law’s requirements and faced the possibility that they could be classified as employees. As a result, many freelancers and others have lost income because many employers were unwilling to take the risk due to AB 5’s penalties or were financially unable to shoulder the costs of an additional employee for project-based work.

AB 2257 is intended to address some of those issues. Among other things, the bill establishes exemptions from the ABC test for various professions and occupations. For example, under AB 2257, the “ABC test” will not apply to musicians, recording artists, songwriters and other specified occupations “in connection with the marketing, promoting, or distributing sound recordings or musical compositions.” These exemptions are not across-the-board; the bill details several circumstances in which musicians, vocalists, and others involved in the music industry or performance arts would likely be treated as employees.

The measure also removes the current 35 project limitation for services provided by freelance photographers, journalists, writers, and others. As a result, these freelancers no longer have to be hired as employees or lose project-based work after 35 submissions provided that other requirements are satisfied, such as making sure there is a contract with specified terms, their own equipment is used and work is performed offsite.

Although AB 2257 addresses some of the problems with AB 5, it still does not go far enough. Importantly, the bill does not clarify that music and performing arts instructors providing independent music and/or arts education lessons should be specifically exempted from the ABC test requirements. In the coming months, and in preparation for the next California legislative session, NAMM will be working in partnership with like-minded organizations to bring this important and timely issue to the attention of key decision makers in the California State Assembly and Senate.