Home Gray box 3 Coronavirus and new independent contractor law deliver one-two punch to event industry

Coronavirus and new independent contractor law deliver one-two punch to event industry

It’s been a tough few months for event organizers in California.

Earlier this year, several festivals, including the Lake Tahoe Jazz Festival and the Northern California Pirate Festival, announced the cancellation of this year’s festivities as a result of the state’s new independent contractor law. 

“Due to the ambiguous wording and the lack of exemptions given to performing artists and musicians in California Bill 5 (AB5), we have experienced administrative and legal hurdles that have proven to be problematic,” a statement released by the Northern California Pirate Festival organizers read.

“We simply do not believe we can produce the festival without taking on a rise in costs that would prove disastrous, until the law is clarified and amended,” they added. 

Over the past month, cancellations due to the emergence of the new COVID-19 coronavirus have further decimated business opportunities for event professionals across the state.

“The full impact of the virus is unknown and could both affect attendance and have longer-reaching consequences that simply cannot be predicted,” the pirate festival organizers said in their March 10 statement announcing this year’s hiatus. 

The California Department of Public Health, as well as public health agencies in other states, have advised the cancellation of events with over 250 attendees for the month of March, a timeframe that could be extended if risk-levels increase or persist. 

Dylan Louros runs his own business installing and operating LED-screens at concerts and festivals, including several Goldenvoice festivals held aboard the Queen Mary. Louros said he’s already lost business as clients scramble to adjust their relationships with independent contractors like himself, some opting to cut ties and rely on existing staff alone. 

Now, event cancellations resulting from the spread of coronavirus are exacerbating the economic pressure he’s facing. “The tour I’m on is getting cancelled,” Louros said. “And when I get home, I have nothing.” 

While employees qualify for state unemployment benefits if laid off, independent contractors, freelancers and gig workers generally do not. Combatting misclassification and opening up benefits like unemployment insurance and workers compensation to employees formerly misclassified as independent contractors was the stated intent of the bill.  

Lawyers like Samuel Dordulian, managing partner at Dordulian Law Group, have been able to use the new law to their clients’ advantage. 

“From my perspective of applying it to workers comp[ensation], AB 5 has been a great thing for my clients,” he explained. “As applied to people who otherwise would have no benefits whatsoever when they get injured at work, they have a fighting chance now.”

But many in the event planning industry, including Louros, have bemoaned the impact the new law has had on their ability to attract and retain clients. 

“The ENTIRE EVENT & FESTIVAL INDUSTRY is dealing with AB5,” Drew Michael Rivera, a freelance production manager and technical director from Carlsbad, commented on a post in the Freelancers Against AB 5 Facebook group. 

“We are a project based industry and we rely heavily on a contract work force to execute short term work opportunities,” he continued. “No production company could ever afford to hire the 100’s (sometimes 1000’s) of people it takes to produce an event.”

Despite the loss of business he’s experienced as a result of the current public health crisis – and the financial insecurity that entails – Louros said his disapproval of the new regulations has not changed. “If AB 5 didn’t exist, it would be easier for me to find work,” he argued. “No event companies are going to hire employees right now.”

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