Did California Ruin It for All Freelancer Copywriters?
In case you haven’t heard, back in December California passed a new law, designated AB-5, designed to address complaints that companies like Uber and Lyft are taking advantage of their drivers.
Advocates of AB-5 believe that freelance and gig workers should start getting benefits like health insurance and guaranteed wages.
It's a movement that could eventually change how we think about “freelancing.”
Here’s the thing … freelancing allows you to choose what you do, when you do it, and how much you get paid. And yes, employers like using freelancers as part of their workforce because it helps them fill the gaps in workload without a long-term commitment. It’s a WIN-WIN!
But if you want guaranteed hours, healthcare, or other benefits, it might make more sense to be an employee, not a freelancer. In other words, there’s a big price to pay if you want all of those other things …
And that price is freedom.
There are now over 50 million people in this country freelancing, and generally speaking, those people are okay with trading the security of a traditional job for the freedom that freelancing provides. And some just like the opportunity to make a little extra cash on the side.
Which all brings me to this email:
AWAI member Jack C. from California wrote in to ask us about the impact of AB-5.
I’ve been an AWAI customer for a year or two now in hopes of starting a second career as a writer. While researching business options I came across the December 2019 California legislation that narrows the definition of ‘independent contractor,’ which had the unfortunate and possibly unintended consequence of capturing freelance writers within an employee-employer construct. I have read with dismay that organizations such as Vox Media have said they won’t hire CA-based freelancers because of the potential employment consequences. What insight do you have that might embolden me to continue?
Here's my answer for the benefit of everyone, along with a few links that might help you dig a bit deeper.
There's definitely a lot of confusion around California's new law, most of it a result of the way they have defined it.
The information I've found has said freelancers like writers and marketers are largely exempt.
But there are still some limitations. For example, they arbitrarily defined 35 as the limit to the numbers of "articles" a freelancer can submit before becoming classified as an employee.
And that number only applies to a small subset of writers — freelance writers submitting to newspapers and magazines.
Here’s a link to an article in the LA Times that discusses the freelance writer limitations.
So how does that apply to, say, promotional writers like copywriters? Is a promotional package considered one piece of work, even if it might include dozens of pieces of collateral?
It’s not clear. That’s why you should look at yourself as a “freelance marketing consultant” … which is better positioning anyway. As the great Dan Kennedy put it, you’ll make a helluva lot more as a “copywriter + consultant.”
Here's a link that discusses the overall legal positions.
You'll see here that marketing professionals fall under the category of “Workers Providing Professional Services” and are exempt from the law as long as they pass certain criteria. Most of these are typical practices of freelancers:
- Maintain a business location separate from the hiring firm (work from home!)
- Have a business license
- Be able to set or negotiate your own rates
- Be able to set your own hours
- Either be under contract for the same type of work with another firm or at a minimum be available to other firms for the same type of work. In other words, if you’re working full-time, exclusively for one client, you should technically be an employee.
- Exercise discretion and judgement performing your services … so you hold creative power over the work.
This covers the majority of the conditions … and again, all of these aren’t just standard practice for the typical freelance copywriter …
They’re the very definition of freedom and why we do this in the first place.
But, as Jack asked in a follow-up question, what is technically legal may be entirely different than how companies choose to act or how their lawyers recommend they act.
And he’s 100% correct.
Unfortunately, there will still be some companies who choose to err on the side of caution because of AB-5. That means California-based freelancers could face fewer options.
My advice to those freelancers is to ignore the small number of businesses who are going to worry about this and go out and find real clients — clients that understand how to run a business and how to find and pay for great work. I live in Pennsylvania and I have yet to get a significant contract from anyone in my state. Copywriting is a job without boundaries.
I look at this as no different than the fact that there are companies out there who prefer not to hire freelancers at all. They're in the minority, but they exist. The truth is, if that’s their attitude, they’d probably make for a poor client anyway.
In summary, freelance copywriters and marketers are mostly exempt from California’s AB-5.
But there is still plenty of work available and accessible to California freelancers, even if some businesses choose to be careful about it.
There are over 30 million small- and medium-sized businesses in America …
Many of them struggling to get their online marketing game in shape and others still working the traditional direct-marketing channels in print.
Hope this helps. If you have any questions or you’ve had direct experience with AB-5, please hop in the comments and let us know.
Disclaimer: I am not a lawyer nor have I ever played one on TV. This information should not be construed as legal advice, just guidance to help get you started.
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Creating an LLC in another state might be a solution?
Thanks for the excellent primer, Jon. AB-5 notwithstanding, your point about working solely for one client as a freelancer is spot-on for the reason you list -- you could be considered an employee. Not to mention, there's risk having all of your eggs in one basket. That can be a fragile situation because that basket can disappear. Trust me, I know!
Brad McMillen –