A New Law in California Should be a Topic of Conversation in Your Shop

The music store, in addition to being a sales center and place of education, is also an excellent locus of scuttlebutt, a place where news and rumor can happily overlap, and details about things like fret size and stomp-box design become major topics. All this gossip, dish, and buzz can also help keep a store at the center of what’s happening in the music community. Now, there’s a case of unintended consequences coming down the pike that will impact their customer base that retailers should be aware of, and that should be the center of some serious in-store buzz.

California’s new freelance law, Assembly Bill 5 (AB-5) went into effect January 1, but even before then had ginned up considerable concern among musicians, drawing the ire of the Record Industry Association of America, indie organization A2IM, and the Music Artists Coalition. The idea behind the law is that many workers are misclassified as contractors, enabling corporations that use their services to save money by not having to pay for protections such as workers’ compensation and unemployment insurance. However, AB-5’s wide net is falling on almost every kind of freelancer, from Uber drivers to uber drummers. Freelancers must meet certain criteria that clearly establish them as self-employed independent contractors, such as that they are free from the control and direction of the company that hired them while they perform their work. These conditions have been around for some time and used by the IRS to determine if someone is an employee or and independent contractor, which affects their tax-filing status. What’s different with AB-5 is that the new law codifies a much stricter set of requirements regarding the classification of employees and puts the burden of proof on employers to show that a worker is properly classified as an independent contractor, and those corporations are not happy about that.

AB-5 is a move to make it easier for participants in the growing “gig economy,” such as ride-share drivers and DoorDash deliverers, to demand the kinds of benefits that employees receive, such as minimum wage and overtime, workers’ compensation coverage, unemployment insurance. But it muddies the waters around those who have been true freelancers all along. In an extreme case of “be careful what you wish for,” the law could result in musicians, producers, engineers, vocalists and others being compelled to be regarded as employees in many types of situations, entitled to the protections listed above. That would cost those who hire them far more, which would have the unintended effect of cutting back hiring overall.

Musicians are literally the original inhabitants of the gig economy – they play actual gigs. But playing a particular club or other venue regularly could trigger AB-5, as could weekly performances at churches. A well-intentioned law meant to rectify the oppression of piecemeal workers could actually put some of those workers out of work.

It Matters To Your Customers

AB-5 only affects California, but its sentiments are increasingly shared in other cities and states as drivers, couriers and other gig workers seek the kinds of benefits that employees often take for granted. They deserve what the law seeks to accomplish. But it also negatively impacts the MI customer base, and as such it’s a topic that ought to be up for discussion at MI stores. Retailers don’t necessarily have to share the alarm expressed by various musicians’ organizations – indeed, AF of M members are essentially exempt from the law because the union’s collective bargaining already represents their interests, and orchestral musicians are often already employees. But fundamentally industry-altering events such as AB-5 present an opportunity to connect with customers on another plane besides that of gear and lessons.

Chances are you and your customers are not chatting about the stock market or currency trading in the store, but AB-5 is part of business that hits home for MI customers. You may not live in California, but like surf music and pineapple on pizza, what happens there often also goes everywhere else eventually.