Providing independent contractors access to labor protections and benefits would help businesses comply with labor laws and spread costs more evenly.
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By Angie Kim
Angie Kim is president and CEO of the Center for Cultural Innovation, email@example.com.
Amanda Briggs, Special to CalMatters
Amanda Briggs is a research associate at Urban Institute, firstname.lastname@example.org.
Independent contractors are excluded from traditional employment benefits such as unemployment insurance, minimum wage standards, workers compensation and protection from discrimination and harassment.
The lack of protections is particularly acute among arts workers in California where 35% are self-employed. This lack of protections includes business owners, sole proprietors, independent contractors and gig workers. If independent workers had access to additional social insurance programs, worker protections and other employer-conferred protections during the COVID-19 pandemic, more people experiencing unemployment would’ve had a safety net, and our economy could recover more quickly.
As the economy’s reliance on gig workers expands, California has tried to protect them by ensuring they’re not mistakenly excluded from the benefits and protections they should be receiving.
In 2019, the California Legislature passed AB 5 to address misclassification of independent contractors who should be employees. Misclassification denies individuals workplace protections and benefits. A subsequent bill, AB 2257, clarified who should be treated as employees and exempted some occupations and business relationships from AB 5, including creative occupations such as fine artists.
While unemployment insurance benefits were temporarily extended to independent contractors under the CARES Act, legislation since hasn’t extended worker protections or solutions for true independent contractors who don’t meet the definitions of an “employee.” As so many workers are struggling amid the COVID-19 pandemic, it’s become clear we need robust safety nets that include independent contractors, gig workers and freelancers.
In a recently released report titled “Arts Workers in California,” researchers from the Urban Institute examine how independent workers can be included in benefits and protections conferred by more traditional employer relationships. The study explores the need for worker protections by describing the experience of arts workers, a group that is three times more likely to be freelancers.
Arts work is typically project-based, short-term, intermittent and involves overlapping and simultaneous “gigs” at one time. Consequently, artists also face challenges that are shared by other independent workers unable to plan ahead due to unpredictable income, limited accrued savings, difficulty paying off student loan debt and affording health care, families and retirement.
When laws protecting workers were created, lawmakers hadn’t imagined how robust the freelance workforce would be. Gig work is clearly here to stay, yet the social insurance supports and legal protections available to independent workers haven’t caught up to the changing workforce.
Current law assumes that freelancers have power to negotiate their contracts and the resources to provide their own safety net. The report focuses on a specific segment of this workforce – the arts – to dissect these assumptions and demonstrate why accessible benefits and protections matter for arts workers and those invested in a more inclusive arts field. If we can get this right for artists, we can get it right for the many other gig workers who share their conditions.
The Urban Institute’s report proposes solutions, including strengthening classification laws to prevent employees from being misclassified as independent contractors – as AB 5 intended – extending worker protections and social insurance programs to freelance workers and other contractors, and scaling collective action and nontraditional worker organizing efforts to rebalance power.
New forms of collectivizing for workers are needed for accessing portable benefits and protections, bargaining power, affording health care, and protecting workers from discrimination and harassment. Each of these paths would improve conditions not only for arts workers, but for the millions of Americans who make their living through independent work.
In addition, by providing access for all types of workers to labor protections and benefits, it helps businesses comply with labor laws and spread costs more evenly across hiring entities, taxpayers, consumers of art and workers themselves.
California has a history of being at the forefront of implementing policies to protect workers, and this is the moment to think outside conventional boxes to make our economy more resilient. This is the moment for California to consider innovative new ways of extending protections and benefits to workers whose work never fit into the traditional employer model.