Do you know your ABCs? As a writer, you probably think you do. But if you’re an American freelance writer, the ABC Test is something else altogether.
If the ABC Test becomes federal law, it could destroy the livelihoods of freelance journalists across the country. Along with the careers of many other types of freelancers, too. Everyone from real-estate appraisers to cafeteria ladies.
Yes, there’s a very real threat to American freelancing coming — and now is the time to organize to defeat it.
To understand what’s happening and how to preserve our freelance lifestyle, I need to give you a little background on similar state laws. Activists have learned a lot from wins and losses there that they plan to use in fighting similar, national legislation.
I also outline below what you can do to help preserve independent reporting and the free press.
It’s an important issue not just for those of us who freelance for newspapers and magazines. It matters for all of us who rely on independent reporting to stay informed, and who want workers to have the flexibility to run our own home-based businesses.
Read on to learn the ABCs of freelance law, and the legal proposal that could change everything.
Meet the PRO Act
True, it’s not one of Biden’s stated top-four priorities (the economy, COVID-19, racial justice and climate change). But Biden has strong ties to labor, his nominated Labor Secretary is a former union president, and unions have been big Biden supporters.
So expect The PRO Act to pop up on the agenda sooner than later.
The point of the bill began as strengthening the right of workers to organize and unionize. But a definition of who’s a freelancer and who’s a contractor was added to the bill as well. Luckily, you don’t have to wade through reams of legalese to get to the big problem for freelancers: The ABC Test it contains that is the proposed federal definition.
It’s right on the first page. Here’s a screenshot:
If you’re a copywriter, you should be OK here. You’re writing for a widget maker, and their primary product isn’t marketing copy. It’s widgets.
But that point “B” of the ABC Test poses a barrier to any freelancer writing for a publication. Articles are the core, ‘usual’ business of that employer. If you’re writing articles for them as a freelancer, you flunk the ABC Test.
Does an LLC help?
There’s a rumor going around that if you incorporate your freelance business as an LLC or corporation, you get a pass on the ABC test. But it’s not true, says Kim Kavin, a longtime freelance journalist and a co-founder of the activist group Fight For Freelancers USA.
If you flunk any of the items in ABC, you can’t freelance for that client. Your corporate form doesn’t help.
ABC vs IRS
If you’re wondering, this ABC test for who’s an employee and who’s a contractor dates from the 1930s. There’s a more recent test for telling freelancers from employees that dates from the 1980s, and it was created by the Internal Revenue Service.
It’s been being used for tax purposes for decades — and freelancers feel it’s the rule that should be used in The PRO Act, instead of the ABC Test.
In essence, the IRS rule says independent contractors have multiple clients, and do work on their own schedule, at their own place of business, with their own tools. It’s a simple definition that’s served to clarify freelancing for decades, in tax filings.
Then, along came Uber and Lyft, and an increased focus on the ‘gig economy.’
Unions soon pointed out that it could be considered worker exploitation for drivers to risk their lives — letting strangers get into their cars which might also crash and injure them — without even the protections full-time employees enjoy, such as paid healthcare. (Though the drivers themselves said they prefer to stay freelance.)
Lawmakers started looking for ways to compel the app-based companies to make their drivers into employees, and the ABC Test reared its ugly head. (Read on below for how that worked out in California.)
Something you may have missed: The PRO Act already passed the U.S. House of Representatives, nearly a year ago. With a Republican-controlled Senate, however, the bill stalled didn’t become law.
Now that Democrats control both houses and we have a Democratic incoming president, The PRO Act is back on the table for 2021. If you’re someone who’s been dancing for joy at the turnabout in party control of the U.S. government… here’s the dark side.
How can freelancers fight the ABC Test and get the PRO Act amended, so it’s fair to freelancers? The history of similar state laws gives us the answer.
States vs the gig economy
Three states have put forward labor laws with the ABC Test as their guide: California, New Jersey, and New York.
California’s Assembly Bill AB5, passed in September 2019, hit most freelancers out of the blue. It wasn’t publicly debated, and implementation was immediate. The result was chaos — and a lot of journalists losing freelance jobs.
To sum up a very, very long story, here in bullets is the California legal arc:
- Sept. 2019: AB5 implements the ABC Test. Freelancers lose work, as confusion erupts over who can hire what sort of writer when. Particularly onerous for reporters: A specific, 35-piece limit provision that makes it impossible to be a freelance weekly columnist.
- Sept. 2020: AB2257 amends AB5. Scores of carve-outs and exceptions for dozens of industries soften the damage from AB5, including removal of the 35-article cap for writers. But problems remain, including a rule that freelancers must have a contract before working. That’s difficult to pull off if you’re a journalist, photojournalist, or videographer rushing to the scene of a protest or fire. Activists note this rule amounts to an assault on independent journalism and results in the suppression of news, as all news organizations have long relied on stringers or freelancers to get news their staffers can’t access.
- Nov. 2020: Prop 22 exempts Uber and Lyft. The ride-share companies take their case to the voters, spend big, and win. People want cheap cabs! The original reason for AB5 is defeated by this voter initiative.
Freelancers continue to press for full repeal of AB5, to resolve the confusion these three separate, and in some ways conflicting, pieces of legislation have wrought. The American Society of Journalists and Authors (ASJA) is among the organizations suing over what the group points out are First and 14th Amendment violations in the AB5 provisions that impact journalists.
“AB2257 made some things worse, with provisions that only apply to freelance writers, no other type of freelancer,” notes JoBeth McDaniel, a freelance writer who chairs the First Amendment committee for ASJA.
California’s AB5 dropped on freelancers as an unexpected A-bomb (partly because it had no public comment period). When New Jersey and New York floated similar bills after AB5 passed, Kavin says, freelance journalists were ready for them.
How activists won 2 ABC Test battles
When New Jersey and New York both tried to follow suit with similar laws to California’s AB5, freelancers swung into action. Op-eds and letters to the editor were sent by freelance writers to the Philadelphia Inquirer and other area papers.
Activists followed up with organized letter-writing campaigns to New Jersey lawmakers and in-person visits, to explain face-to-face how freelancers work and that they prefer their independent lifestyle. This was eye-opening news for many lawmakers, Kavin says. Few had ever freelanced.
“When we explained how we earn a living, and how well many of us earn,” Kavin says, “they were flabbergasted. And once they learn it, they don’t want to cause us harm. When we don’t speak up, then they just hear from those who say we’re being exploited by the gig economy.”
The New Jersey bill went down to defeat in January.
In New York, Governor Andrew Cuomo compared gig workers to 1930s sweatshop workers and vowed legal action in his ‘state of the state’ address last January. A full-court press by freelancers followed, and no bill was ever floated. After input from freelancers, Cuomo vowed to set up a commission to study the issues. But then along came Covid, and it was never formed, Kavin says.
Yes, Virginia has a way
Meanwhile, one Blue State quietly passed a new labor bill in 2020. It creates strict new definitions to avoid worker misclassification and encourage corporations to classify workers as employees.
The good news? The bill used the IRS test to define freelancers, preserving freelancer rights. Activists plan to hold up the Virginia law as a model for how the PRO Act should be revised.
Pro Union, Pro Freelancer
As a former union member myself (OPEIU, yo!), I’m glad to see the focus on strengthening unions. It’s no secret that the decline of unions means a shrinking American middle class.
But union strength and the freedom to freelance both need to be upheld. The Virginia law shows we can do both.
What you can do to save American freelancing
There are a couple of avenues to opposing The PRO Act’s freelancer language.
One lies in supporting a new labor rule passed in the final days of the Trump administration, which uses the IRS test for defining freelancers.
Watchers expect this last-minute law to be quickly nullified by the incoming administration. But if it stood in place, freelancers would be fine.
The other, more likely route is lobbying to change the PRO Act language to use the IRS test instead of the ABC Test. Virginia’s law has shown that there is a middle path that strengthens unions yet preserves freelancers’ rights to work as they choose.
Activists need to hold up the Virtginia example, write letters to the press and federal lawmakers, and if possible call on lawmakers in person to educate them about freelancing and the many workers who prefer to be their own boss, Kavin says.
Note: This post has been updated to include several clarifications, including on the focus of the PRO Act and of the ASJA lawsuit, as well as the nature of the labor ruling.
Concerned about The Pro Act? Let’s talk strategy in the comments.
Published at Sun, 17 Jan 2021 06:00:00 +0000