Skip to content

Open Letter to Gov. Newsom Reignites Debate Over Controversial AB5 Law

Small Business Relief Loan Program Runs Out of Cash

The government’s small business rescue loan program, which is part of the $2.2 trillion COVID-19 relief package, has hit its $349 billion limit and is now basically out of money. The loans, which are forgivable if businesses meet certain conditions including not laying people off, are administered by the Small Business Administration (SBA). The organization says on its website that it is “unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.” Jen Kelly, SBA communications liaison, confirmed to The Epoch Times in an emailed statement that “all PPP funds are exhausted.” There have been repeated warnings that the PPP funds would run out amid a surge of interest from small businesses hard-hit…

Open Letter to Gov. Newsom Reignites Debate Over Controversial AB5 Law

TEMECULA, Calif.—Many independent contractors have found themselves caught in a whirlpool since California’s controversial AB5 law went into effect on Jan. 1—and the pandemic has intensified it.

The law prevented them from working on a contract basis, and it meant they had to find full-time employment instead, something many of them have struggled to do.

The COVID-19 pandemic and the current economic uncertainty has made that even more difficult, and calls to suspend AB5 have ramped up.

An open letter—addressed to Gov. Gavin Newsom on April 14 and signed by 151 economists and political scientists, all with doctorate degrees—is calling for an “immediate suspension” of AB5 to allow independent contractors to work during the pandemic.

“This is both an argument about economics and an argument about humanitarian needs,” Dr. William Evers, a senior fellow at the Independent Institute, told The Epoch Times

“We should be encouraging opportunities for jobs, or helping. We shouldn’t be blocking jobs.”

The letter was initiated by the Independent Institute, which bills itself as a “non-profit, non-partisan, public-policy research and educational organization.”

But while opponents say the law has cost independent contractors millions of jobs, supporters continue to steadfastly defend it, arguing AB5 guarantees benefits and rights to workers that are long overdue.

When Rep. Darrel Issa (R-California) recently joined the chorus of voices asking Gov. Newsom to suspend the law, calling it “an economic drain on our current society,” one of the bill’s original authors responded sharply.

“It takes a special kind of politician to attempt to take away the new rights of countless workers to paid sick leave, unemployment insurance, and healthcare during a pandemic,” Assemblywoman Lorena Gonzalez (D-San Diego) said in a statement. “That’s what suspending AB5 would actually do.”

But the new open letter argues that the law has had unintended consequences, and “has pushed all of the risks and all of the costs of a vibrant gig economy onto lower- and middle-income individuals.”

“By prohibiting the use of independent contractor drivers, health care professionals, and workers in other critical areas, AB-5 is doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them,” the letter states.

It adds that the self-isolation caused by the current pandemic has “created an immediate need for flexible and low-cost ways of delivering goods to customers”—and that these needs could be “served by enabling independent contractors currently hindered by AB-5.”

“Economists easily understand the problem,” Evers explained. “Many political scientists understand, too—so they were already willing to sign.”

But Gonzalez suggested in an April 15 tweet that the law is actually working as intended.

Uber and Lyft have recently been hit with claims of $630 million in back wages, the tweet reports, filed by drivers who say they have been misclassified as independent contractors. The hiring practices of both companies contributed to the need for the original bill, supporters have said.

By not classifying their workers as employees, the companies avoided paying taxes and benefits, including sick days and unemployment insurance.

“If these companies had the slightest concern for their workers, they would have complied with the law from day one,”  Art Pulaski, executive secretary of the California Labor Federation, said in a statement on April 15.

“By refusing to comply with the law to classify workers as employees … these companies deliberately held up funds that drivers could be using now to pay for necessities like rent and food,” he added.

“There are a million more workers here who are also suffering, all because the companies they work for refuse to call them employees.”

Still, Evers doesn’t think the legislators ever foresaw how AB5 would keep independent contractors, in hundreds of industries, from working. The letter argues that “hiring someone in a traditional job, with hours and benefit requirements, is too expensive” in the current pandemic.

“A mountain of work needs to be done, deliveries made, and people stranded at home helped to receive groceries and medications,” the letter states.

“Meanwhile, furloughed Californians stand on the verge of being wiped out financially because the law prevents them from working part time in a variety of indispensable positions.”

Many different groups—including nurses, drivers, and performing artists—agree, and have started petitions on, hoping to repeal AB5.

The letter adds: “While employers are not hiring, gig workers could shoulder myriad tasks that are needed to flatten out the effects of the temporary emergency. It doesn’t really matter how great the pay is, how predictable are the hours, nor how generous the benefits may be, if the law prevents a job from existing in the first place.”

Another hurdle independent contractors have been facing during this time has been receiving relief funds, since they are not classified under any employer.

But on April 15, Gonzalez said via tweet that all independent contractors and sole proprietors, including gig workers, would be able to file for unemployment assistance beginning on April 28. The assistance would be retroactive and would apply to all “misclassified employees,” meaning those who work freelance jobs.

Gov. Newsom confirmed on April 15 that a new website had been created to allow independent contractors and gig workers to apply for Pandemic Unemployment Insurance.

More than 22 million American workers have filed first-time unemployment claims in the past four weeks. Meanwhile, the debate rages on, and opinions diverge widely on social media as well.

“The Governor’s insistence on keeping #AB5 in place while Californians remain at home defies expert opinion, common sense, and basic decency,” Assemblyman Kevin Kiley (R-Rocklin) wrote in a tweet on April 15.

On the other side, Sara Flocks, a Sacramento-based policy coordinator, wrote on Twitter, “This is why we pass laws mandating paid sick leave. … we need to enforce laws like #AB5 … to make sure gig workers have the protections other workers get.”

“AB5 has no place in the lives and professions of independent musicians,” singer Alex Nester replied to Gonzalez in an April 13 tweet. “IT IS KILLING US.”

Gonzalez’s office did not immediately reply to request for comment.


This article is from the Internet:Open Letter to Gov. Newsom Reignites Debate Over Controversial AB5 Law

Phase One of Reopening Will Be Expanding List of Essential Businesses: NY Governor

“What’s the next level of essential businesses? Are there certain businesses that are inherently safer or can be safer?” he added. A matrix developed by officials pointed to companies that provide services or products that are “more essential” and that have a low risk of infection spread among customers and employees opening “ASAP,” or as soon as possible. The next phase would target companies that provide “more essential” services or products but have a higher infection rate or companies that are “less essential” but have a low infection risk. The final phase would see the rest of the companies, which are “less essential” and have a higher infection risk, opening. For now now, Cuomo extended his stay at home order to May 15 and expanded an order he issued this…