Q4 2019

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32 C I N E M O N T A G E L A B O R M A T T E R S What Will AB5 Mean for Labor? I n early September, California's Sen- a t e a n d A s s e m b l y p a s s e d a b i l l t h a t w o u l d re q u i re e m p l o y e r s to classif y many of its workers as em - p l o y e e s i n s t e a d o f a s i n d e p e n d e n t contractors. The bill was signed by Gov- ernor Newsom in mid-September. Now, as employees, hundreds of thousands of former independent contractors would be guaranteed certain employee rights, including a minimum wage, overtime pay and unemployment insurance. More important, these newly reclassif ied workers would be able to join unions. The new law, referred to as the Gig Employment Law or AB 5, targets ride sharing companies like Uber and Lyft, t r u c k i n g c o m p a n i e s , c o n s t r u c t i o n companies and others. It was backed by a powerful coalition of labor unions. I t i s e x p e c t e d t o g o i n t o e f f e c t o n January 1, 2020. A B 5 c o d i f i e s t h e 2 0 1 8 D y n a m e x California Supreme Court decision that established a three-part test to deter- mine whether a worker is an independent contractor or an employee. Uber, soon after the passage of the bill, declared that the law's key provisions would not apply to its drivers, according to The New York Times. Uber's defiance "set off a debate that could have wide economic ramifications for businesses and workers alike in California, and potentially well beyond as lawmakers in other states seek to make similar chang- Compiled by Jeff Burman es." Uber claims to provide a ride referral service, and therefore doesn't see itself as an employer. A week af ter the bill was passed, several Hollywood unions said the new bill "is not directed at our industry." The IATSE, WGA West and SAG-AFTRA went on to say "we do not believe it will trigger a change to industry practices." "Over the past four months, we have carefully monitored this legislation as it was drafted and moved through the California Legislature," the unions said. "During that time, we conducted due diligence within our own guilds and unions, with outside tax attorneys, CPAs, and entertainment lawyers knowledge- able about our business and loan-out companies, and with legislative staff in Sacramento. These conversations were all undertaken to ensure that AB 5 would not undermine the rights secured by our collective bargaining agreements, including the right to form and utilize loan-out companies." Guild members are concerned about the bill's possible effect on whether or not they can use loan-out companies. Loan-out companies, according to Dead- l i n e H o l l yw o o d , a re c o m m o n i n t h e entertainment industry and are usually set up for tax and legal purposes, mak- ing the individual the "employee" of their loan-out, that then "loans" their services to an employer. Many signatory companies who hire guild members have UNION MEMBERS FRET IMPACT OF NEW LAW ON LOAN-OUTS Assembly woman Lorena Gonzales sponsored California's controversial AB5. P H O T O : A P I M A G E S

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