California’s Assembly Bill 5 just went into effect. With some exceptions, the law takes aim at the new gig economy and independent contractors, forcing businesses to choose between hiring contractors as employees or laying them off.
A week before Christmas, Vox Media’s SB Nation, a sports website, sent notice to some 200 of its California-based freelancers that they would no longer be allowed to be paid for their pieces—the new law stipulates that any freelance writers who contribute more than 35 pieces a year must be employees. So SB Nation is ditching its independent contractors in California.
An even more consequential battle over the law is taking place in the courts, where a federal judge issued a temporary restraining order on behalf of the California Trucking Association and its 70,000 independent truckers. The judge is considering a permanent injunction on the basis that the wide-ranging California labor law violates federal law as it pertains to the trucking industry, much of which engages in interstate commerce.