California Bill Could 'Gut the Music Industry,' But Lawmaker Says Trade Groups Couldn't Agree on Exemption

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California State Assembly

"We were hopeful they would reach an agreement," says Assemblywoman Lorena Gonzalez, but "the recording industry preferred no legislation at all."

A piece in legislation in California aimed at supporting workers rights might have adverse consequences on musicians in the state, warn music executives and trade groups. But the lawmaker behind it says she tried to work with the music industry to include an exception, but different groups within the industry couldn't agree on terms to make it happen. 

California Assembly Bill 5 (AB5), which is set to be voted on by the legislature as soon as Tuesday, was written to limit the practice labeling workers as "independent contractors" and to prevent the exploitation of workers, particularly by rideshare apps such as Uber and Lyft. However, music executives said the bill in its current state would crush the creation of independent music in California by defining any artist who hires a person to assist them -- including producers, engineers, publicists, managers, dancers, background vocalists and others -- as an employee and subject to stringent employment regulations. 

Last week, American Association of Independent Music (A2IM) president and CEO Richard Burgess, RIAA chairman and CEO Mitch Glazier, Music Artists' Coalition, Azoff Company co-president Susan Genco and attorney Jordan Bromley, co-wrote an op-ed imploring the legislature to amend the bill. Speaking with Billboard, Burgess says the well-intended bill is too broad as written by allowing independent artists and musicians to be considered employers. The informal creative process of the independent music creation does not lend itself to regulation, he said, adding that allowing musicians to continue to classify anyone who works with them as independent contractors makes more sense.

"Unless there is an exemption for the music industry, it will make every studio engineer, employees for whoever is hiring them," says Burgess. "On a practical level, I don't see how it can work."

Meanwhile, Assemblywoman Lorena Gonzalez (D-80), who authored AB5, tells Billboard she had been meeting and discussing all year with artist unions and the recording industry on how this bill would impact the work of musicians, but that in the end the recording industry could not come to a consensus on language. Instead, the groups preferred no amendment related to their industry in AB5 at all.

After the California Supreme court's ruling in a case involving same-day courier and delivery service Dynamex to establish a strict three-part test to determine whether a worker could be classified as an independent contractor, Gonzalez says it was important to enact legislation that created a clear and consistent standard in the state on employment status. Workers can only be classified as independent contractors per the ruling if (1) they are free from control and direction of the company that hired them while they perform their work; (2) the worker is performing work that falls outside the hiring companies usual type of business; and (3) the worker has their own independent business or trade beyond the job for which they were hired. These are the standards included in AB5 and that, if passed, would apply to the music industry. 

"All year, we have engaged with the recording industry, individual artists, and unions representing artists, musicians and actors about how this new court decision will impact their work," Gonzalez said in a statement. "We were hopeful they would reach an agreement, but once language was drafted to chart a path forward after the Dynamex decision, the recording industry preferred no legislation at all. Although we have reached the end of the current legislative year, I'm committed to find consensus in this industry in the year ahead."

Burgess said the proposed law will also dissuade musicians from coming to the state to create. Burgess said his organization, as well as the RIAA and others, are still hoping that an exemption for musicians is included before the bill is voted. Exemptions have already been carved out for lawyers, doctors, architects, accountants, travel agents, commercial fishermen and photographers.

"There is sort of an unholy scramble of more than 50 industries are trying to get exemptions," said Burgess. "We are going to have to work something because it is going to be very difficult for anyone to make records, shoot videos unless we can make an exemption for these people."

He said they have been "running into a brick wall" trying to get this exemption included. The current system has been working fine, he added, but that now if this law passes as is that it will "gut the music industry." 


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