California’s AB5 & the Impact on Music

Efforts to Amend New Law to Protect Music Makers

 

The Recording Academy is working on efforts to amend California’s AB5 to better protect musicians, songwriters, studio professionals and other individuals working in the music industry from the bill’s unintended consequences.  Learn how.

What is AB5?

Following the California State Supreme Court Decision in Dynamex, the California legislature passed Assembly Bill 5 (AB5) in September 2019, with the intention to regulate gig-economy workers like Uber, Lyft, and Doordash drivers, along with other independent contractors doing business in the state. AB5 changes classification requirements for independent contractors, enabling many former contractors to have access to labor protections, such as sick leave and workers’ compensation. The bill was signed into law by Governor Gavin Newsom, and took effect on January 1, 2020.

As enacted, the bill has a number of unintended consequences for individuals in the music industry. Artists and performers, songwriters and composers, and studio professionals who previously worked in California as independent contractors could now be classified as an employee or an employer. The same is true for other individuals working in music industry related jobs like publicists and promoters. AB5 could now add untold costs for compliance, accounting practices, and new business expenses such as payroll processing to a musicians’ overhead. Recording Academy members of the Los Angeles and San Francisco Chapters have already reported that AB5 has hurt their ability to secure work in California, with many music makers considering the prospects of leaving California permanently.

What the Recording Academy is doing

The Recording Academy is working with a coalition of artist and label organizations which have been engaged with key stakeholders in California to amend AB5 to exempt many music industry professionals. The negotiations have been productive, and the Academy is optimistic that language can soon be finalized, with the goal to have the music industry exemption included in an AB5 “cleanup bill” which is expected to be introduced in Sacramento in March. Assemblywoman Lorena Gonzalez (D-San Diego), who was the lead sponsor of AB5 in 2019, is leading the cleanup bill, and is in constant communication with the music community on our efforts.

In addition to working on a draft exemption, the Academy also hosted a panel discussion during GRAMMY weekend in Los Angeles with leading activists from the music and law communities to discuss the impacts and costs AB5 could have on California’s music ecosystem. Similarly, the Los Angeles and San Francisco Chapters of the Recording Academy have been keeping their members abreast of latest updates.

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