The loss of the majority of independent contracting work in California equals a massive loss in jobs. And today, it means limited opportunities for work, exacerbating the unemployment crisis brought about by COVID-19. In addition to job loss, employers are faced with the burden of making sure that they are properly classifying their employees, at risk of being fined, or worse, sued.
The lawsuits that followed AB 5’s enactment takes extraneous time both on the companies and the civil justice system. It wasn’t just Uber and Lyft that faced litigation — local businesses everywhere struggled to adhere to the new regulation.
In fact, because AB 5 is set up to be applied retroactively, not only can an employer be sued for misclassifying an employer today, they can be sued for a misclassification that happened any time in the past four years. These cases are still be litigated in the midst of the COVID-19 pandemic.
Ever since its passage, AB 5 has become a trial attorney’s favorite new excuse to bring suit against hardworking business owners in order to make a profit. With its technicalities and its retroactive application, AB 5 simply makes it too easy for entrepreneurial lawyers to take advantage of the law. So, lawsuit after lawsuit continues to be filed, and business after business will continue to go under.
It costs a lot of time and resources to fight off a lawsuit, and California business owners simply can’t afford the risk given the fragility of the economy. When AB 5 was enacted a year ago, no one saw the COVID crisis on the horizon. But today, it is just one more reason to scrap AB 5. It’s time we bring proper reform to this destructive law so that California can finally have the chance to recover from the economic, coronavirus-led recession, without these roadblocks in their way.