Constitutional understanding requirement allows self-enforcement of independent contractor arguments

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Valley News - Opinion

This commentary is intended to address only the issue of willing creative services professionals being able to remain independent contractors, so I will not note specific laws which have been struck down as unconstitutionally vague, but I will state that courts have nullified legislation deemed not specific enough to determine whether a citizen is in compliance.

In 2018, the California Supreme Court issued a ruling on the requirements to be classified as an independent contractor rather than as an employee. Previous protocol included the criteria of the worker having control of how the scope of work is to be performed and having made the independent decision to go into business for themselves. After trucking company workers desiring benefits argued that they should be employees rather than independent contractors, the California Supreme Court declared that three standards must be met, adding that the services performed must be outside the usual course of work for the business. In 2019, the state legislature passed Assembly Bill 5, which codified the court decision while providing exemptions for some activities, which allows those willing professionals to remain as independent contractors.

The exemptions include freelance writers and photographers with fewer than 35 submissions a year to a specific publication. That arrangement provided the relief magazine writers needed but still forces writers and photographers for weekly publications, websites and daily newspapers to meet the more stringent standard of performing work outside the usual course of business. Graphic artists, musicians and magicians are also facing the impacts of AB 5.

For the sake of magicians and musicians, I will address the California liquor license law.  If the liquor license classifies the venue as a restaurant, children under 21 can be present during the hours when food is served. If the venue is classified as a public premise, a visitor must be at least 21 years old to enter. If that public premise serves food, the requirement of being 21 to enter still applies since a threshold is needed to declare the venue a restaurant rather than a bar. The usual course of business for a public premise which serves food is thus a bar.

It means that the usual course of business of a nightclub with a public premises liquor license is a bar, so musicians, disc jockeys and karaoke jockeys provide services outside the usual course of business even if they do so on a weekly or nightly basis. The primary course of business for a restaurant is serving food, not entertainment. A venue which has a magician on a regular basis but does not primarily provide prestidigitation has a usual course of business, which allows a regularly performing magician to remain as an independent contractor.

In my case, the usual course of business of the suburban weekly newspapers for which I write is events which occur within their coverage area, not events in San Diego or Del Mar. I provide a specialized service that is not within the publication’s usual course of business. That identification should allow me to write more than 35 stories a year for the same publication and still be classified as an independent contractor.

My argument that I provide specialized services – along with the arguments or other creative professionals who assert that they qualify as independent contractors – will need the concurrence of the publication or entertainment venue. The specific language of AB 5 shows that the worker shall be classified as an employee “unless the hiring entity demonstrates that all of the following” criteria to be considered an independent contractor are met.

The specific wording is “demonstrates” – not “proves” or “proves beyond a reasonable doubt.” The legislation said “demonstrates” – not “demonstrates to the California Department of Labor.” There is no specific language regarding the threshold of demonstration nor is there a reference to the specific entity to which the criteria must be demonstrated.

To me that means that the hiring entity must demonstrate to the worker that they meet all three criteria. Given that one of the other criteria is the worker’s desire to be an independent contractor, the worker’s argument about providing specialized services should be sufficient. If that argument is not sufficient, AB 5 is unconstitutionally vague. AB 5 and the previous year’s court decision protect creative services professionals who desire the benefits of being an employee, but the specific wording allows for self-enforcement when the worker and hiring entity concur that specialized services allow for the retention of independent contractor status.

Joe Naiman can be reached by email at jnaiman@reedermedia.com.