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As Predicted, California’s Gig Economy Labor Rules Are Already Backfiring

Back in September, the state of California passed AB5, the law requiring all companies using contract workers in the state to treat them as employees.

Labor activists and unions were insistent that this law was necessary to provide security and stability to the thousands of contractors and gig economy workers throughout the state.

At the time, we warned it would be very harmful both for consumers and contractors. Our comments were featured in a Mashable article, as well as hosted on our website. Now, it seems it panned out, unfortunately.

Because of the stricter regulations on companies based in the state, various media outlets have announced they would be laying off thousands of freelance and contract workers they can no longer afford to employ.

Specifically, Vox Media, who called the law a “victory for workers everywhere“, announced it was parting ways with all of its California-based freelancers.

The layoffs are, of course, unfortunate. No one supports large and systematic firings, and certainly not in the news media, a vital industry to our democracy. But the economic trends in journalism have been negative for several years.

However, at the same time, it’s important to note that these kinds of laws, those that seem the most well-intentioned, actually end up having very detrimental effects.

That’s a lesson for practically every piece of legislation, and why we will continue to be active at the Consumer Choice Center. Laws have consequences that are very real and impact people’s lives.

Let’s hope California can clean up its act and allow freelancers and contractors to make a living without too much interference.

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