A battle is being waged in Sacramento right now between worker rights groups and corporations, and it may be quietly damaging the very people it is intended to protect. It is perfectly encapsulated with the recent AB 5 bill signed into law by Governor Gavin Newsome, a bill that makes it much more difficult for small businesses to utilize contract employment.
The authors championed it by painting the issue as battling for the rights of “hard-working families,” and standing up against “Tech-Giants” like Uber and Lyft. You know who you didn’t read much about? How it would impact the over three-million small business owners in California.
While large corporations with their cadre of lawyers and HR departments are fully equipped to absorb these types of legislative hits – Uber and Lyft are already claiming to have a work around – small business owners are rarely so lucky. Between bills like AB 5, rising minimum wage requirements, and a growing list of insurance, HR compliance and regulatory laws, the small business owner is left to take the only action they have left – forgo hiring and work even longer hours.
As the President of the Greater Coachella Valley Chamber of Commerce, I often meet with local small business owners, and my conversation last week with a local print shop pretty much sums up the situation. They would love to hire on a few more contractors to help when business picks up, and they know several people who need the work, but with all the labor requirements and liability they just can’t afford (or risk) bringing them on. The owners instead work longer hours to make up for it, or they turn away work.
There are a lot of issues in the state today that are legitimately hard to tackle, care for the homeless, rising health care cost, etc. Protecting small business owners isn’t. The champions of AB 5 found it in their hearts to offer a temporary exemption to the newspaper industry, and a permanent exemption to groups like attorneys, doctors, dentists, lawyers, architects, financial advisers, and real estate agents (all of which the chamber supports), so they could have very easily extended one to small business owners as well. They didn’t. Despite the loud objections of many local chamber’s, including the GCVCC, they choose to put yet another onerous regulatory requirement on them.
The irony in their actions is that small business ownership, which is often preceded by independent contracting work, is still one of the most viable options for working-class families to accumulate wealth. Of all the working groups in California, wouldn’t you most want to protect and support that pathway?
We certainly are not obtuse to the game of politics. We understand that many small business owners can’t be represented by traditional labor unions and don’t have the millions of dollars large corporations and industries have to lobby, but their value to the State’s economy and the millions of family’s they support still deserves attention from elected officials on both sides of the aisle.
AB 5, like any law, can be fixed. We encourage our local elected officials to do just that when they return to Sacramento.
For more information on what AB 5 is and how it may impact your business, click HERE.
Joshua R. Bonner is the President and CEO of the Greater Coachella Valley Chamber of Commerce. The Chamber represents over 1,400 business members, one of the largest chamber’s in California. The Chamber is dedicated to being a strong advocate for the small business community in our valley.