California’s Assembly Bill 5 — AB 5 — goes into effect on January 1, 2020 and requires companies to classify/reclassify/correctly classify their California-based independent contractors to employees — or risk significant fines.
The Free Speech Coalition (FSC) recently published a “simplified guide” to help members of the adult entertainment community navigate the new law. The guide seeks to “break down the law into simple terms and provides potential options for adult companies and workers.”
“There is widespread confusion about what is actually in the law and how to comply with it,” said FSC Executive Director Michelle L. LeBlanc.
“The one thing that is clear is that there is significant potential risk for any business that pays California-based workers — from studio and cam performers to production crew to office staff — as independent contractors,” LeBlanc continued. “[The FSC will] be doing more education about AB 5 in the new year, but with so much confusion, and the law going into effect in just a few weeks, we wanted to provide clarified guidance for our members.”
“The FSC Guide to AB 5” is available on the FSC website here. Though the entire thing is relevant to everyone in the industry, YNOT Cam is reproducing some of guide’s more directly-relevant-to-models sections below.
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The Basics
California Assembly Bill 5 (AB 5) was signed into law this September and goes into effect on January 1, 2020. AB5 creates more stringent requirements for the type of workers who can be classified as contractors. Based on these requirements, many workers who are now classified as contractors must be reclassified as employees in order for employers to comply with the law.
AB5 applies to all employers in the State of California and any employer outside the State of California who employs people working in California.
Those who willfully misclassify employees as independent contractors could be subject to criminal penalties under the Labor Code and civil penalties of $5,000 to $25,000 per violation.
How does this impact me, as a performer?
AB5 has the potential to reclassify any performer working for a studio or site as an employee of that studio or site, no matter how many different studios you shoot for.
If you live or work in California and currently receive income as a contractor for adult work, it is possible that some or all of your employers will decide to reclassify you as an employee rather than a contractor.
Pros
Being classified as an employee provides you with additional rights, protections, and benefits, such as:
- Employers would have to pay you at least the minimum wage.
- Based on the number of hours you work, you could be eligible for overtime, meal and rest periods, and sick leave.
- You would also be eligible for short-term disability insurance, unemployment insurance, workers’ compensation insurance, and Family Medical Leave Act (and other types of protected leave).
- Depending on the size of your employer and the number of hours you work, you could also be eligible for health insurance benefits.
Cons
As an employee, classification may change how and what you are paid, and how you work:
- Employers could exercise more control over your work, including limiting your daily or weekly hours, in order to conform to policies about overtime and insurance.
- If you receive all of your income as an employee and none as a contractor, you will likely not be able to deduct business expenses on your tax returns.
- You might make less money as an employee than as a contractor. It costs more for an employer to classify you as an employee than it does to classify you as a contractor. (This is by no means a valid reason for an employer to classify you incorrectly as a contractor.) An employer could choose to pay you less for the same work if are reclassified as an employee.
- Even if an employer were to pay you the same amount for the same work, you will see more money deducted from your pay if you were classified as an employee.
- State and federal taxes will be deducted from each check.
- Social Security and state disability insurance will also be deducted from your paycheck. You may benefit from these in the long run, but they will impact your take-home pay.
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Go to the full guide to read details regarding “How does this impact me, as an employer?” and what to do next and how to obtain additional resources.
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Erika is a sex positive people watcher (and writer). Email her at erika@ynotcam.com.
Header image via Pexels here.
