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Entertainment Law & FinanceFeaturesEntertainment and Sports LawLegislationRegulation

Agreement to Amend CA's AB5 Helps Music Industry

By Sidney S. Fohrman and Ariel D. Shpigel
June 01, 2020

On Sept. 18, 2019, Assembly Bill Number 5 (AB5) became law in California, paving the way for dramatic changes in California's gig economy. AB5 was designed to provide labor protections for "misclassified independent contractors," including the application of minimum wage laws, overtime, sick leave requirements, and unemployment and worker's compensation. Once put into practice, however, AB5's negative impacts on industries that rely substantially on an independent contractor workforce quickly became illuminated. After over a year-and-a-half of lobbying efforts by the music industry and negotiations with lawmakers, it was recently announced that AB5 would be amended to accommodate musicians' unique niche in the California economy.

AB5, which added §2750.3 to the California Labor Code, codified Dynamex Operations West Inc. v. Superior Court, 4 Cal. 5th 903 (2018), a California Supreme Court case which used the "ABC test" to classify an individual as an employee or independent contractor. While the previous S.G. Borello & Sons Inc. v. Department of Industrial Relations, 48 Cal. 3d 341 (1989), test used in California placed the burden of proof on the employee to prove misclassification using a variety of flexible, discretionary factors, the ABC test shifted the burden of proof to the employer and created a presumption of employee status.

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