Numerous workers across California have reacted with dismay when impacted by Assembly Bill 5, a policy that took effect at the beginning of the year, involuntarily reclassifying many independent contractors as employees.
Although the bills' author, Assemblymember Lorena Gonzales, claims the legislation helps workers, the law harms them by raising their taxes, taking away their ability to set their schedule, and sometimes even putting them out of work entirely.
AB 5 impacts agricultural workers, including farm labor contractors, irrigation contractors, agronomists, pest control advisors, workplace safety advisers and human/labor relations consultants, according to the California Farm Bureau Federation.
Many of these impacted individuals are immigrants exercising their entrepreneurial spirit to build a better life for themselves and their families. Like all business owners, they invest not only their hopes and dreams and their hard work in their jobs — they also incur costs.
They travel long distances over bad roads. The high cost of gas is a burden, and their vehicles incur heavy wear and tear. They also must invest in equipment and supplies.
All of these expenses are tax deductible for workers employed as independent contractors, but they lose access to this deduction when reclassified as an employee by AB 5. That's why AB 5 is a massive tax increase on many Latino and immigrant entrepreneurs.
Latino entrepreneurs are America's fastest-growing group of business owners, according to a Stanford University study. Their efforts should be encouraged, not stifled with unnecessary taxes and punitive policies.
Entrepreneurship offers a pathway to the middle class for those willing to put in the work and take the risk. However, Latino entrepreneurs face economic changes, such as more limited access to traditional sources of capital. A considerable tax increase brought to them by AB 5 is the last thing they need or want.
Our economy has significantly evolved in recent decades. Technology has made it easier for more people to start businesses. The "gig economy" has brought new challenges and opportunities. Meanwhile, union membership has crashed. Many workers have decided that union representation outweighs its benefits.
Senate testimony revealed the real author of AB 5 was not Assemblywoman Lorena Gonzalez, but the AFL-CIO union. It wants to turn back the clock. By involuntarily reclassifying independent contractors as employees, it harms workers but hopes to reverse their decline.
Gov. Gavin Newsom had indicated his intentions to embrace the future, stating in 2017, when he was lieutenant governor, "every rule isn't black and white, the world is constantly evolving and changing, that some of these rules need to be updated, sunshined, reconsidered."
Assemblyman Kevin Kiley has introduced legislation postponing the implementation of AB 5. This is Newsom's opportunity to show leadership and recognize AB 5 is just the sort of outdated law he pledged to take action on in his 2017 remarks.
The future is here. Let's ensure all communities can share in the benefits.
Jesse Rojas is a farmworker rights activist, spokesperson for Pick Justice, founder of California Farm Workers & Families and a Central Valley Taxpayers Association board member.