The music industry gets relief from California’s AB5 gig economy law

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RF Shannon performing at LA venue Gold-Diggers Photo: Tyler Hale

As the music industry reels from the impact of the coronavirus pandemic, professionals are seeing some relief thanks to a new agreement on pending amendments to California’s “Gig Economy” Assembly Bill 5 (AB5).  The agreement, announced by a coalition of trade groups on April 17, will provide exemptions for singers, composers, songwriters, recording artists and other music workers impacted by the bill, which took effect in January. The amendments, which will take effect upon the Legislature’s reconvening, will change prior language in AB5 that created obstacles for securing work amongst the industry’s heavily freelance workforce. 

AB5 has been largely centered on protecting the emergent wave of gig economy jobs like rideshare drivers for Lyft and Uber by making it more difficult for such companies to classify workers as independent contractors rather than employees. But for the music industry — from which the term “gig economy” originates — professionals may work with dozens of employers a year, often on a single project or performance. The bill’s original language would require songwriters, producers, session musicians and others to be legally designated as employees in order to collaborate, requiring professionals to establish payrolls and W2 forms for a single recording or performance. Critics of the original bill have argued that doing so places an inhibitive financial and bureaucratic burden on gig-to-gig projects. 

The bill has drawn intense backlash from California’s music and arts communities since Governor Gavin Newsom signed the sweeping labor legislation in September, sparking outcry from workers and trade groups that the law would “gut the music industry.” Those concerns have only grown as the spreading coronavirus pandemic has sharply curtailed work opportunities across the industry. 

“My attorney told me to stop working in December — she said you can’t work under this new law, you should just stop. But how can you just stop working?” says Allee Futterer, an L.A. writer-producer and bassist who performs with acts like Mayer Hawthorne, Kiesza, and Donna Missal. “AB5 takes the choice out of where and how people work, which — with every business shut down right now — was only going to make that worse.”

New amendment language for musicians

The pending amendment, which was reached with California Assemblywoman Lorena Gonzalez and Majority Leader Ian Calderon, introduces new language that states most music professionals will be able to follow the Borello test — which determines if a person is an employer — to define employment classification for live performances and studio recordings, rather than the stricter, three-part ABC test introduced in the original bill. The language also provides for unions to continue to organize the work of musicians. Musicians will continue to receive protections under AB5 in cases where work involves significant direction and control from an employer.

“In partnership with Majority Leader Calderon, I’m pleased to say that representatives from across the music landscape have reached a consensus to move the industry forward when it comes to workplace rights,” Gonzales said in a statement. “When the Legislature reconvenes, new amendments will acknowledge and add to the existing flexibility California has allowed in the music industry while protecting the right for musicians to have basic employment protections just like every other worker.”

Added Calderon: “I want to thank all parties involved for helping us reach this resolution for industry and workers. When it comes to protecting work and workers in California, we want to make sure we get it right. I’m glad I was able to have a part in making this happen.”

Assemblywoman Gonzales introduced new legislation in January to continue addressing issues with the law affecting California musicians and a number of other industries

A minority of proponents of AB5 within the music industry, who were concerned amendments would erode what few protections musicians are currently granted under W2 employment, say they are happy with the new clarifications but think they could stand to be expanded.

"The legislature has another year to make more amendments, and I expect there to be further clarifications for various small issues," said Martin Diller, an L.A. music director and professional drummer who met with Gonzalez in December on behalf of the minority opinion. Such issues, Diller says, should include exemptions for opening acts on larger stages and festivals, who don't receive high payouts from such live engagements; musicians and crew at large places of worship; and engineers who regularly work at venues. He also believes the capacity number for venues and festivals from which musicians are exempt from AB5 was too high.

"Mainly, we were worried that the music industry would be fully exempt from AB 5. This is a great compromise that will make most folks happy, as it really doesn’t change much. Do I wish it went further? Yes, but I’m very happy with this result."

Coalitions working on behalf of musicians

Jordan Bromley of the Board of the Music Artists Coalition, who helped lead negotiations on behalf of independent artists and the music industry, touted the commitment of the government and trade groups who have worked to find an acceptable solution over the past year. 

“I can say that each elected official, coalition, association, union and individual working on behalf of their constituency truly cared about not only the members they work to protect, but also our industry as a whole,” Bromley said in a statement. “This is a significant result that is critical to our industry’s success in today’s economy.” 

Independent musician, author and artist advocate Ari Herstand leads the newly formed Independent Music Professionals United (IMPU) coalition, which met with lawmakers and created a petition that received over 185,000 signatures towards negotiating amendment language with all invested stakeholders.

“As a songwriter and book author, I never thought that one of the most impactful things I’d ever have a hand in writing would be a law for the state of California,” Herstand said. “Life is funny sometimes.”

Elmo Lovano, a musician and co-founder of the professional musicians network Jammcard who worked closely on the amendment, says the amendment and the formation of advocacy groups like the IMPU marks a critical step towards modernizing a long-decentralized music industry with few labor protections and resources. 

“Our goal was to save as many musicians as possible, as soon as possible,” Lovano said, explaining the challenges of the extensive back-and-forth required to meet the specific needs of each group involved. 

“It was very hard to make everyone happy, but I'm happy with where we got it and feel it's a huge success. Our main focus was the independent musicians and artists, and getting them to be able to create and release music as they already were without adding unnecessary complexities, costs and difficulties that could end their music career entirely.” 

Musicians and artists can make music as they were, Lovano said, returning the more streamlined system free from payroll, which demanded administrative hassles even for small payments. “We have more that we want to accomplish in the near future,” Lovano said, “and we'll continue to do it one step at a time.”

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This piece has been updated with a quote from Martin Diller