Independent contractors are excluded from traditional employment benefits such as unemployment insurance, minimum wage standards, employee compensation, and protection from discrimination and harassment.
The lack of protection is particularly acute among art workers in California, where 35% are self-employed. This lack of protection includes business owners, sole traders, independent contractors, and gig workers. If independent workers had access to additional social security programs, worker protection and other employer-provided safeguards during the COVID-19 pandemic, more people with unemployment would have had a safety net and our economy could recover faster.
As the economy’s reliance on gig workers grows, California has sought to protect them by making sure they are not mistakenly excluded from the benefits and protections they should receive.
In 2019, California legislation was passed Bill 5 Eliminate the misclassification of independent contractors who should be employees. Misclassification denies the individual the protection and benefits in the workplace. A subsequent invoice, FROM 2257, clarified who should be treated as salaried employees and exempted some jobs and business relationships from AB 5, including creative professions such as visual artists.
While unemployment insurance benefits were temporarily extended to independent contractors under the CARES Act, the legislation has not since extended worker protection or solutions for real independent contractors who do not meet the definition of a “worker”. With so many workers grappling with the COVID-19 pandemic, it has become clear that we need robust safety nets that include independent contractors, gig workers and freelancers.
In a recently published report entitled “Art worker in California, “Researchers from the Urban Institute examine how independent workers can be included in benefits and safeguards provided by more traditional employer relationships. The study examines the need to protect workers by describing the experiences of art workers, a group that is three times more likely to be freelance.
Art work is usually project-based, short-term, intermittent and involves overlapping and simultaneous “gigs” at the same time. As a result, artists also face challenges shared by other independent workers who cannot plan ahead due to unpredictable incomes, limited savings, difficulty paying off student loan debts and providing health care, families and retirement.
When laws were put in place to protect workers, lawmakers had no idea how resilient the freelance workforce would be. Gig work is clearly here to stay, but the social security support and legal protections available to independent workers have not caught up with the changing workforce.
Current law assumes that freelancers are empowered to negotiate their contracts and the resources to provide their own safety net. The report focuses on a specific segment of this workforce – the arts – to analyze these assumptions and identify why accessible benefits and protections matter for artists and those investing in a more inclusive arts field. If we can do this right for artists, we can do it right for the many other gig workers who share their terms.
The Urban Institute report suggests solutions, including tightening classification laws to prevent employees from being misclassified as independent contractors – as intended by AB 5 – to extend worker protection and social security programs to freelance workers and other contractors and the collective action and efforts to scale nontraditional workers to rebalance power.
New forms of collectivization for workers are needed to gain access to affordable benefits and safeguards, gain bargaining power, provide health care and protect workers from discrimination and harassment. Either of these avenues would improve the conditions not only for art workers but also for the millions of Americans who earn a living from independent work.
Also, by providing access to labor protection and benefits for all types of workers, companies can comply with labor laws and share costs more evenly among recruiters, taxpayers, art consumers and workers themselves.
California has pioneered worker protection policies in the past, and this is the time to think beyond traditional boundaries to make our economy more resilient. This is the time for California to consider innovative new ways to extend protection and benefits to workers whose jobs never fit the traditional employer model.
Angie Kim is President and CEO of Center for Cultural Innovation. Amanda Briggs is a research fellow at the Urban Institute. You wrote this column for CalMatters, a public-interest journalism company dedicated to explaining how the California State Capitol works and why it matters.