Industry & Advocacy News
December 30, 2019
We have been receiving inquiries about California’s new law AB-5 and similar pending legislation in other states that require companies hiring individuals on a freelance basis for labor or services to treat them as employees, unless the individual’s work falls within one of several exceptions. Laws like AB-5 (which goes into effect on January 2) are meant to aid gig economy workers, such as Uber and Lyft drivers, who work for a single company and have no employee protections. They are well-intentioned pieces of legislation, but unless they are narrowly written, they can go beyond protecting gig workers and disadvantage many traditional freelancers who wish to remain independent by overriding existing state agency law.
To be clear, the Authors Guild fully supports employment protections for freelance journalists and authors, and will be lobbying for collective bargaining rights in 2020. Like Uber drivers, writers have no benefits and are often paid less than minimum wage. But forcing writers to work as employees, especially on a state-by-state basis, is not the way to go about it. The situation in California speaks to the importance of deliberation, careful drafting, and getting buy-ins from the various industry groups. Similar “gig worker” bills are in the works in New York and New Jersey. The new draft NJ bill includes a strict, sweeping version of the ABC test. Those working closely on the bill are concerned that freelance journalists will in many cases be treated as employees. We will watch the bill and do our best to ensure that the necessary protections for freelance journalists are added.* The NY bill attempts to exclude freelance journalists, and we have provided comments to the drafters to make it clearer.* (correction 12.30.19)
As many of you are aware by now, much of the debate
surrounding AB-5 comes down to its 35-submission cap applying to the
contributions of freelance journalists, editors, and photographers. When the
bill was being negotiated, a coalition of writer and photographer groups,
including the Authors Guild, was able to get an exception for freelance
writers. Unfortunately, Assemblywoman Lorena Gonzalez, who sponsored the bill,
added a cap of 35 pieces per company—meaning that once a freelance journalist
or editor submits 36 articles or jobs for the same company in one year, the
freelancer must be treated as an employee and the employer must pay California
State unemployment and employee insurances.
Many full-time writers today patch together a living from
different sources—and they want to keep it that way. Because of AB-5, California
freelance journalists writing 35 or more pieces for a single company fear losing
clients to writers in states with laxer laws. Indeed, some publications have
already stated that they will not hire California freelance writers because of
the new law. 35 articles might seem like a lot, but there are plenty of writers
who write more than that. Writing a short weekly blog piece for a client could easily
put a writer over this limit.
Another problem with treating writers as employees and not
freelancers is that employee-writers do not own the copyright in their work;
instead, the employer is considered the “author” under copyright law and
automatically owns the copyright in its creation. Of course, as most major
publications today insist on an assignment of copyright anyway, the practical effect,
unfortunately, is the same: the writer gives up copyright. Still, freelance
writers who assign copyright can reclaim it after 35–40 years, which is a
benefit that employee-writers lack.
Authors have raised alarm that AB-5 will apply to book writers
as well. The Authors Guild has been reviewing the bill from that perspective
since it was first introduced. We were assured by those working on the bill
that trade book authors are not covered, and we do not see a basis for disagreeing
since the bill clearly states that AB-5 applies only to “persons providing
labor or services” and authors provide neither “labor” nor “services” under standard
book contracts—they instead grant copyright licenses or assignments.
Additionally, royalties—even in the form of advance payments—are not considered
wages. It is difficult to imagine how a court would conclude that a typical
book contract is for labor or services.
There are, however, some book-writing agreements that could
be considered service agreements and arguably would fall under AB-5, such as work-made-for-hire
agreements and contracts where the author has ongoing obligations and the
publisher has greater editing ability or control over the content. Authors and
writers working under multi-book contracts are most likely to encounter such a
situation. These authors’ contracts should be reviewed by an attorney to
determine whether they are subject to AB-5. Publishers and authors who want to
be certain to retain a freelancer relationship should be careful to make sure
the contracts are written as simple license grants and not as services
agreements. For instance, the agreement should be written as a copyright grant
of a defined work without interim or ongoing obligations, and renumeration
should be in the form of royalties and advances against royalties. The writer
should also have full control over their work and use their own workspace and
tools. As a general rule, it is also recommended that freelance editors and
journalists have written contracts that allow them to work when and where they
want with no oversight other than approval of the finished work product.
If you have such a contract and are an Authors Guild member,
remember that we do review members’ contracts for free. You can send us the
our online form, and our legal team will get you comments and let you know
if you need to revise the agreement.