The New California Law (AB5) is ‘anti’ freelancer, or is it?
California is like that one friend who keeps insisting to help organize your closet because she loves it and wants to be helpful- but then you can’t find anything and it sorta makes it worse.
Nevertheless- here we are.
So this month there is lots of conversation and freak-out about California Bill 5 [AB5]- Net net on Jan 1: freelancers no longer allowed, must be independent contractor OR employee. Here are the three things the individual needs to have to prove they do not need to be an employee*…
AUTONOMY: The worker is free to perform services without the control or direction of the company.
SPECIALIZATION: The worker is performing work tasks that are outside the usual course of the company’s business activities.
HAS LLC/ VARIETY OF CLIENTS: The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Freaking out? Wait! Many of you are exempt!**
-Doctors (physicians, surgeons, dentists, podiatrists, veterinarians, psychologists)
-Professionals (lawyers, architects, engineers)
-Professional services (marketing, human resources administrator, travel agents, graphic designers, grant writers, fine artist)
-Financial services (accountants, securities broker-dealers, investment advisors)
-Insurance brokers
-Real estate agents
-Direct sales (if compensation is based on actual sales and not wholesale purchases or referrals)
-Builders and contractors
-Freelance writers and photographers (if contributes no more than 35 submissions to an outlet in a year)
-Hair stylists and barbers (if licensed and if can set own rates and schedule)
-Estheticians, electrologists, and manicurists (if licensed)
-Tutors (that teach their own curriculum, and that are not public school tutors)
-Commercial fishermen
-AAA-affiliated tow truck drivers
For those of you who are not on the above except list- in many cases the 3 point ‘test’ could be achieved, by establishing clear job listings showing need for differentiation of talent need and allowing more project control to reside with the individual. (Freelancers you should ASK for a copy of the job listing upon acceptance of a new project and keep on file/ employers you should pay much more careful attention to how you craft these.)
And it goes without saying, if you are a freelancer you should consider an LLC to better show you are a vendor, a contractor- A BUSINESS. If you are an employer you may wish to provide resources to help your current California freelancers set it up and encourage them to take on outside clients (FWIW set up those NDAs now, so proprietary knowledge is not leaked).
Something else that is not mentioned in AB5 but I have seen discussed in legal groups is eliminating FULL-TIME freelancers. Project based is far more favorable to the goal of AB5. If you are a full-time freelancer, or if you have hired a full-time freelancer you are the ones the bill is looking for…
Basically, in the AB5 world, a full-time freelancer = employee.
And while discussing this with a self claimed ‘tax geek’ it was mentioned that freelancers need to be filing a Schedule C. If a freelancer reports 1099 income as miscellaneous, that’s how the Franchise Tax Board will search for people who should be employees (under AB5). If the freelancer has a business bank account (e.g.: Jane McGulacutty Copy-writing Enterprises— using their full name eliminates the need for fictitious name filing) and files the 1099 income as part of their Schedule C, it will never show up as a line item for CA to question. The tax software will ask if the 1099 is for miscellaneous income or business income.
新加州法律 (AB5) 是“反”自由职业者，是吗？
加州议会法案 5 (AB5)
加利福尼亚就像一个朋友，她一直坚持帮助整理你的衣橱，因为她喜欢它并想提供帮助——但是你什么也找不到，这有点让事情变得更糟。
尽管如此，我们还是在这里。
所以这个月有很多关于加州法案 5 [AB5]- 1 月 1 日网络的讨论和恐慌：不再允许自由职业者，必须是独立承包商或雇员。以下是个人需要证明他们不需要成为员工的三件事*...
自治：工人可以在不受公司控制或指导的情况下自由执行服务。
专业化：工人正在执行公司业务活动正常过程之外的工作任务。
拥有有限责任公司/各种客户：工人通常从事与所从事的工作具有相同性质的独立建立的贸易、职业或业务。
吓坏了？等待！你们中的许多人是免税的！**
-医生（内科医生、外科医生、牙医、足病医生、兽医、心理学家）
-专业人员（律师、建筑师、工程师）
-专业服务（市场营销、人力资源管理员、旅行社、平面设计师、赠款作家、美术师）
-金融服务（会计师、证券经纪商、投资顾问）
-保险经纪人
-房地产经纪人
- 直销（如果补偿是基于实际销售而不是批发购买或推荐）
-建筑商和承包商
- 自由作家和摄影师（如果在一年内向一家媒体提交的作品不超过 35 份）
- 发型师和理发师（如果获得许可并且可以设置自己的费率和时间表）
- 美容师、电学家和美甲师（如果有执照）
-导师（教授自己的课程，而不是公立学校的导师）
-商业渔民
-AAA附属拖车司机
对于那些不在上述名单之外的人 - 在许多情况下，可以通过建立明确的工作清单来显示需要区分人才需求并允许更多的项目控制权与个人一起来实现 3 点“测试”。 （自由职业者在接受新项目时应要求提供工作清单的副本并存档/雇主您应该更加注意如何制作这些内容。）
不用说，如果您是自由职业者，您应该考虑成立有限责任公司，以更好地表明您是供应商、承包商 - 企业。如果您是雇主，您可能希望提供资源来帮助您当前的加州自由职业者进行设置并鼓励他们接受外部客户（FWIW 现在设置了这些 NDA，因此专有知识不会泄露）。
AB5 中未提及但我在法律团体中讨论过的其他事情是消除全职自由职业者。基于项目的对AB5的目标更加有利。如果您是一名全职自由职业者，或者如果您聘请了一名全职自由职业者，那么您就是账单正在寻找的人……
基本上，在 AB5 世界中，全职自由职业者 = 员工。
在与一个自称“税务极客”的人讨论这个问题时，有人提到自由职业者需要提交附表 C。如果自由职业者报告 1099 收入为杂项，这就是特许经营税委员会寻找应该成为雇员的人的方式（根据AB5)。如果自由职业者有一个商业银行账户（例如：Jane McGulacutty Copy-writing Enterprises——使用他们的全名消除了虚构姓名申报的需要）并将 1099 收入作为其附表 C 的一部分提交，它永远不会显示为一行供 CA 质疑的项目。税务软件会询问 1099 是用于杂项收入还是营业收入。
Citation: The New California Law (AB5) is ‘anti’ freelancer, or is it?
Comments