AB5 and Court Reporting
Hello, I'm going to use this page as my update page wherein I update whatever I learn about the Assembly Bill 5 (AB5) which -- to my and my attorney's way of thinking -- is an existential threat to the entirety of the court reporting industry. I plan to update this page any time I have something to say about this topic.
I interviewed attorney and lobbyist Ed Howard, Esq. about the ramifications of AB5 and court reporting as a podcast. You can find the TOA Storytellers podcast in your favorite Apple or Android podcast apps or by simply going to toddolivas.com/podcast.
UPDATE 9/18/2019 12:20 p.m.
I've been notified that Governor Newsom signed AB5. Please don't be dissuaded from signing the petition, though. We will use the momentum and our collective numbers to work with legislators to propose new laws in the very near future. Our voices will be heard and court reporting will ultimately be protected.
I created my first petition in my life. About anything. Ever. It's a petition to Governor Gavin Newsom to please veto Assembly Bill 5 (AB5). Would you mind reading it, signing it and sharing it? Link: https://www.change.org/p/gavin-newsom-veto-ab5-until-it-exempts-court-reporters
I'm begging everyone to focus their attention on Assembly Bill 5 (AB5) and join me in asking Governor Gavin Newsom to veto it. He can be reached at this page: https://govapps.gov.ca.gov/gov40mail/
This is of the utmost urgency because I feel it is an existential threat to the court reporting industry. I spoke with my attorney about what the ramifications are going to be if Governor Newsom does not veto AB5. According to my understanding this is what will happen on 1/1/2020:
While not illegal it is going to be a lot tougher to be an independent contractor.
- Even if the court reporter incorporates (like an S-corp or LLC), it still does not take away all risk because AB5 does have a number of carve-out exceptions for business-to-business type relationships but none that would help us. In other words, the court reporter/agency relationship has no applicable exemptions in AB5.
- The Dynamex decision previously only applied to the wage order area of the labor code. AB5 has expanded to be virtually all-inclusive. So... wage order, workers comp insurance, unemployment insurance, etc, etc... everything.
- Agencies will likely seek to only hire court reporters as W2 employees (with all of the attendant employment headaches: hours tracking -- including for transcript editing -- meal/rest, taxes, etc.)
- Agencies who do not hire court reporters as W2 employees likely will face very risky scrutiny from the EDD, State Compensation Insurance Fund, and even cities and local prosecutors.
- Using the ABC test, most agencies will likely have a tough time passing the B portion that the worker performs work that is outside the usual course of the hiring entity’s business. Failing that, the agency will be assessed fines and penalties.
- Fines and penalties will be retroactive not on a go-forward basis.
- I was audited by the EDD during 2014 and they attempted to reclassify about 100 reporters as employees instead of independent contractors over the course of a three-year period. The estimated amount I faced owing the EDD would, quite frankly, have bankrupted me. Game over. (Fortunately, I prevailed at that time. Unfortunately, AB5 provides the EDD different ammo this time.)
- Other states will follow suit after California. So expect this to ripple through to other states.
The Governor has 12 days to sign, approve without signing, or veto a bill. If any of the above resonates with you, please join me in reaching out to Governor Newsom and asking him to veto AB5: https://govapps.gov.ca.gov/gov40mail/
Tuesday, September 17, 2019