California Governor Gavin Newsom signed AB5 into law.
The purpose of AB5 is to give benefit and wage protections to those who work for both rideshare companies such as Uber and Lyft and other crowdsourcing companies. One big downside, however: the law could also “gut the music industry” in the state.
AB5 makes it more difficult for companies to classify workers as independent contractors instead of employees. Unlike the former, the latter are entitled to benefits such as workers compensation and have to be paid a minimum wage.
Assemblywoman Lorena Gonzalez, who is the sponsor of AB5, says that the law could affect one million workers in the state. But it might not affect them all in a positive way. Major music industry organizations, including the Recording Industry Association of America (RIAA), American Association of Independent Music (A2IM) and Music Artists Coalition, believe that AB5 could wipe out independent music in the state and have been vehemently opposed to it.
Under the law, the following contractors could now be considered employees of music artists:
- Background Vocalists
Gonzalez says that she talked to people in the music industry during the course of writing the bill, but she insists that the industry was unable to come up with a consensus in terms of how to amend the bill.
In the end, she says the music industry preferred opposing the bill instead of amending it. Other industries, by contrast, had worked at creating carve-outs, time-delays, or flat-out exceptions. In fact, the list of industries receiving special exemptions is lengthy, though music industry organizations seemed unwilling to give an inch.
Richard Burgess, who is the president and CEO of A2IM, was disappointed with AB5’s passage and reiterated how it could destroy the local music industry.
But in a joint statement made with the RIAA and attorney Jordan Brinkley, he vowed to keep fighting the law until it includes protections for the music industry. He says until then, it may be difficult to make music in California.