The Hollywood Fringe has heard our community’s calls for information about AB5, a bill that we ourselves are still learning how to navigate and understand.
We believe in a world where the arts are fully funded, and hiring practices are simple to manage as small theatre practices/organizations, but we know that our community is not there yet due to the lack of funding for the arts.
If your company/organization is regularly hiring theatre practitioners, we expect that you might have other resources beyond what is listed below. Please feel free to email firstname.lastname@example.org with any additional resources.
Because the staff at the Hollywood Fringe is still learning to navigate these new waters we want to be clear: we’re not experts in the labor field, lawyers, or policy makers. We don’t feel comfortable making explicit recommendations to individual producers, as we would not be the legal representatives of your organization if there was any question to our advice.
However, at the Fringe, we’ve learned that easy access to information can be just as powerful as a one-size-fits-all approach to education on new subjects. The Hollywood Fringe has compiled the following resources and information, as a way for our producers to find the information and make an informed decision for you/your production.
Some beginning resources:
- This presentation by lawyer Mark Bookman breaking down the relationship between AB-5 and theatre. There is helpful info in this presentation on what constitutes a volunteer and some ways to reimburse volunteers for things like gas and food.
Who needs to care about AB5?
Any person who is paying employees or contractors as a part of their Fringe show.
What is AB5?
California Assembly Bill 5 (AB5), popularly known as the “gig worker bill,” is a piece of legislation that went into effect on Jan. 1, 2020, and required companies that hire independent contractors to reclassify them as employees, with some exceptions.
Links to the bill & other legal info:
How do I determine whether or not I need to hire someone as an employee or an independent contractor?
This is complicated, and we are not lawyers, nor can we speak to whether or not your production’s team would fit under these categories, but there are two tests that are used to determine the independent contractor’s status:
Assembly Bill 5 codifies a widely used legal standard known as the “ABC test” to determine employment status for the purposes of the California Labor and Unemployment Insurance Codes and clarifies the test’s application. In doing so, this bill seeks to end the harmful practice of worker misclassification.
- In April 2018, the California Supreme Court issued the landmark decision Dynamex Operations West, Inc. v. Superior Court of Los Angeles which unanimously ruled in favor of the drivers and based its ruling on a three part “ABC” test used to determine employment status in other states. The court found workers can only be classified as independent contractors if a hiring business can prove the following three conditions:
- (A): The worker is “free from the control and direction” of the company that hired them while they perform their work.
- (B): The worker is performing work that falls “outside the hiring entity’s usual course or type of business.”
- (C): The worker has their own independent business or trade beyond the job for which they were hired.
Except for app-based drivers, real estate salespeople, and repossessors, workers in all the exempt categories must pass the Borello test to be classified as independent contractors. The Borello test (based on the California Supreme Court's decision in Borello vs. Dept. of Industrial Relations) is similar to the right of control test used by the IRS. It's not nearly as strict as the ABC test. Under this test, the most significant factor is whether the hiring firm has control or the right to control the worker both as to the work done and the manner and means in which it is performed. In addition, the following factors are to be considered:
- whether the worker is engaged in an occupation or business that is distinct from that of the hiring firm
- whether the work is part of the hiring firm's regular business
- whether the hiring firm or the worker supplies the equipment, tools, and the place for the person doing the work
- the worker's financial investment in the equipment or materials required to perform the work
- the skill required in the particular occupation
- the kind of occupation—whether, in the locality, the work is usually done under the hiring firm's direction or by a specialist without supervision
- the worker's opportunity for profit or loss depending on his or her own managerial skill
- how long the services are to be performed
- the degree of permanence of the working relationship
- the payment method, whether by time or by the job, and
- whether the parties believe they are creating an employer/employee relationship.
While no single factor in the Borello test is determinative, the first one—whether the individual's work is the service or product that is the company's primary business—is given the most weight.
More on these types of determination tests:
Other theatre/arts organizations’ resources on how to navigate
- The ABC rule: https://www.edd.ca.gov/Payroll_Taxes/ab-5.htm