Sat Jun 22, 2019, 08:15 PM

Hollywood Faces "Devastating" Costs From California Bill Targeting Gig Economy

What was that about the law of unintended consequences?

"The state legislature is considering a proposal that takes aim at Uber, Lyft and others using independent contractors — but it could render the entertainment industry's tax-lucrative loan-out companies useless.

This fall, Hollywood studio executives may be in for a shock when it comes to their budgets. A bill winding through California's legislature that takes aim at gig-fueled companies like Uber and Postmates may upend long-standing showbiz practices by reclassifying scores of independent contractors as employees, and could render tax-lucrative loan-out companies useless.

The bill, AB 5, which the state assembly passed May 29, is designed to protect workers from being misclassified as independent contractors and therefore denied such employee protections as minimum wage, overtime pay and workers' compensation. It seeks to codify and expand the California Supreme Court's 2018 Dynamex decision, and would presume every worker is an employee — with a few exceptions for people like barbers and real estate agents — unless a company can show that the worker meets three criteria under the so-called ABC Test. The requirement that makes Hollywood nervous is that the independent contractor must perform duties outside the usual course of the company's business. "That test will necessarily lock talent out of being an independent contractor if it passes in its current form," says talent lawyer Rick Genow, whose clients include Debra Messing, Anthony Anderson and Henry Golding. "The economic impact would be somewhat devastating to both talent and the studios."

A doomsday scenario for Hollywood would look like this: A law is enacted with no exemption for entertainment workers; companies opt to treat everyone as employees for all purposes to avoid complications; and loan-outs are effectively dead in the water. The last bit would be especially painful because 2017's Trump tax cuts killed business deductions for employees."

Balance of article at the link:

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Reply Hollywood Faces "Devastating" Costs From California Bill Targeting Gig Economy (Original post)
Muddling Through Jun 2019 OP
rahtruelies Jun 2019 #1
Lira Jun 2019 #2

Response to Muddling Through (Original post)

Sun Jun 23, 2019, 07:34 AM

1. actually for once the cali legislature is doing the correct thing for ordinary folks

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Response to rahtruelies (Reply #1)

Mon Jun 24, 2019, 05:43 PM

2. They'll exempt

"talent". I'd bet on it.

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