Here is a recent article from the LA Times titled Freelancers fear California’s new gig workers law will wipe them out. This latest article about the gig economy law titled AB-5 may change your ability to be classified as sub-contracted labor. It was written about the impact the new law will have on journalists and photographers, which seems to most closely mirror the music professional who earns their living free-lancing. If you haven’t read our earlier blog about AB-5 that explains the law in more detail and provides a list of pertinent articles, read this first: California’s Employment Law Was Rewritten – How Will It Impact You?
It is vitally important that music professionals learn about AB-5 and how it may impact their own careers. The bill was signed into law by Governor Gavin Newsom on September 18, 2019 and is slated to go into effect on January 1, 2020. In a nutshell, the employers (and contractors) face incurring up to 30% in increased costs because they will be required to classify everyone they hire for a gig/session/concert/assignment, etc., as an employee rather than a 1099 subcontractor, thus requiring them to withhold taxes from paychecks, pay payroll taxes, FICA, Worker’s Compensation, Liability Insurance, etc. The reclassified music professional may face up to a 10% decrease in their immediate take-home pay and may not be able to recoup all of the money deducted because as employees they may not be able to deduct as many business expenses as they previously could as subcontracted laborers. Talk to your tax professional about this! We are not CPA’s or attorneys, we are simply trying to get vital information out to the music community.
Many industries, such as doctors, lawyers, architects, engineers, hairdressers, etc. sought an exemption from AB-5 before it was signed into law. However, the American Federation of Musicians declined an exemption for all music professionals. In an earlier article written by Bill Hochberg titled The Music Biz Will Split From California If The New “Gig Law” Sticks, Warn Artists and Label Groups dated Sept. 11, 2019, it was stated:
“Music biz negotiators ran into a wall with the American Federation of Musicians, representing session musicians, according to Jordan Bromley, a board member of MAC and a music business attorney based in Los Angeles. Prominent music manager and executive Irving Azoff is also a member of MAC’s board.
“After much work, a compromise exemption that protects independent artists, songwriters and labels along with the existing collective bargaining agreements was approved by multiple interested parties. And, without discussion, [it was] rejected by the AFM,” Bromley said.
The AFM did not respond to requests for comment.”
We are still looking into the feasibility of having someone host a “Town Hall” forum where we can assemble attorneys, accountants, lawmakers, AFM representatives, etc., as well as Assemblywoman Lorena Gonzalez, who wrote AB-5. The objective of this town hall would be to provide a place where all music professionals can learn about the impact of AB-5 on our careers and get our questions answered.
Be sure to also read the article from the Hollywood Reporter that is referenced in the body of the LA Times article!
Please talk openly to your colleagues about AB-5 and feel free to share our blogs. We need to continue fighting to keep the work here in California, keep our music community working and keep the remaining recording studios open!