DRA`s Position on AB5 and What Reporters Should Do Now

This is a re-print (with permission) from The Deposition Reporters Association 's (DRA) e-note from December 9, 2019. I think it is a very informative piece of information regarding what AB 5 does, how it affects every reporter in California, as well as what to do next.

But first, what is AB 5?

Download the complete e-note in PDF format

*** Redacted SPOILER ALERT portions below ***

Question: Are there ways to try and comply with current law in the meantime that don’t turn the court reporting profession upside down?

Answer: Yes. There are a number of ways reporters and firms can protect themselves.

Option One: Incorporate. This may require consultation with an attorney or CPA, along with other associated expenses, and may take some time to accomplish, but as a corporation you’ll enormously benefit from some tax write-offs, lower tax rates, and advantages not otherwise available to you...

Option Two: Obtain a business license, a Fictitious Business Name (“FBN”) -- also known as a “DBA” or “doing business as” – and a Federal Employer Identification Number (“FEIN”) and do business – again, invoice, get paid, agree to do jobs -- in that name. This option is simpler, won’t require the consultation with a professional, can be done fairly quickly (remember that AB 5 goes into effect on January 1, 2020), and with minimal expense. For your business license, you apply to your city of residence or wherever your home office is located, and the cost for this varies with each city. Then apply to your county for the FBN, and that should be good for five years before it will have to be renewed. For this, select a unique business name – perhaps your name with your CSR number – to ensure that no other business exists under the same name. Then apply for your FEIN, which can be easily done online and should involve no expense.

By doing business through either of these entities rather than through you in your individual name, you will have verified yourself as an independent business entity and so can maintain a business-to-business relationship, as our handout describes that AB 5 requires, with any reporting firm and likely NOT be classified as an employee no matter what the firm does or doesn’t do to exempt itself from AB 5.

Download the complete e-note in PDF format

Monday, December 9, 2019

Todd Olivas

Todd Olivas is a court reporter and entrepreneur.
He founded TO&A in 2003.

  Comment by Elizabeth Cesena | Friday, December 27, 2019
Thank you for valuable information
  Comment by Mary | Saturday, May 9, 2020
Hi Todd. What a great site you have. I have been putting this all off hoping there would be an exemption but now considering just getting a business license and going the dba route. But my dilemma is, where I live is unincorporated so there is no business license to obtain. I am at a loss at what I should do in this circumstance. Do you have any ideas on how I should handle it?

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