EDITOR’S NOTE: This article has been updated to include a statement from EDD media relations. Also, a previous version of the article stated that Carl DeMaio and Reform California did not respond to requests for comment. This was incorrect and has since been changed.
REGION — Conservative radio host and political activist Carl DeMaio launched a petition last week asking Gov. Gavin Newsom to suspend Assembly Bill 5, saying that parents who hire tutors for their children during COVID-19 school closures could face penalties.
Though Assemblywoman Lorena Gonzalez (D-San Diego), who champions the bill, denies the assertion.
AB 5, a 2019 state law and partisan lightning rod, curtails employers’ ability to hire various kinds of workers as freelancers or independent contractors. The law reclassifies such workers as bona fide employees, eligible for employer-funded benefits like “minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave.”
“One of the avenues that desperate parents are turning to is the use of an at-home tutor or a teacher who can come in and help round out the curriculum that the students are getting from online and distance learning,” DeMaio said at a press conference August 5. But if they don’t hit the necessary wickets of hiring that tutor or teacher as an employee, “AB5 could open them up to penalties, fines and investigations” from the state.
DeMaio chairs Reform California, a political action committee geared toward fighting “costly and unfair taxes, mandates and fees” from state and local governments, according to the organization’s web site. He served one term on the San Diego City Council.
Most recently, DeMaio lost his bid to represent California’s 50th Congressional District during the Republican primary in March.
To qualify as an independent contractor under AB 5, many classes of workers must pass the “ABC test.” This test, according to the bill’s text, requires that a contractor “[A] is free from the control and direction of the hiring entity in connection with the performance of the work, … [B] performs work that is outside the usual course of the hiring entity’s business, and … [C] is customarily engaged in an independently established trade, occupation, or business.”
Among other disqualifiers, Reform California says in-home tutors hired ad hoc during COVID-19 school closures wouldn’t meet the third criterion — part C.
Part C is satisfied when an independent contractor “takes the usual steps to establish and promote that independent business,” according to the state Employment Development Department’s web site. Such steps might include “incorporation, licensure, advertisements” and “routine offerings to provide the services … to the public or to a number of potential customers.”
Additionally, “if an individual’s work relies on a single employer, Part C is not met.”
Supporting his concerns, DeMaio also cited Gonzalez’s recent retraction of certain Tweets in which she indicated AB5 would not apply to tutors.
The Coast News asked Gonzalez why she deleted the tweets, but she didn’t respond.
“I am appalled to learn that the state of California would prioritize punishing parents for seeking help for their children at this time of crisis,” said Dane White, Escondido Union High school board trustee, at DeMaio’s August 5 press conference.
Though White later told The Coast News he spoke “only as a voice of warning” and that he has so far “not witnessed” the state coming down on parents for temporarily hiring tutors.
“My personal concern was [Gonzalez’s] deleted tweet and [her] hesitancy to in fact invalidate our concerns,” he said.
Deleted tweets notwithstanding, Gonzalez told The Coast News in an August 7 statement: “AB5 does not prevent a family from contracting directly with a tutor. However, if a parent or guardian is bringing a childcare provider or governess into their home, then requirements in our state and federal tax codes that govern who is considered a household employee apply. These are long-standing rules that pre-date AB5 by decades.”
As The Coast News goes to press, the Employment Development Department, which oversees AB5 compliance, didn’t respond to a request to clarify how the law applies to tutors, other than to say their media relations staff are “researching” the issue.
DeMaio and Gonzalez’s rival interpretation only goes to show that “the law is very confusing,” White told The Coast News. “If neither side can confirm the truth then that solidifies our concern.”
In exceptional cases where the ABC test doesn’t apply, AB 5 leans on judicial precedent from California Supreme Court’s decision in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989). In determining whether a worker is appropriately classified as an independent contractor, the “Borello test” takes into account numerous factors, but especially the amount of control the employer exercises.
The ABC and Borello exempt numerous occupations from AB 5, according to the bill’s text. Among others, these include insurance agents, certain healthcare professionals, investment brokers and advisors, salespeople, and construction contractors and subcontractors.