September 13, 2019

The Honorable Gavin Newsom
Governor, State of California
State Capitol, First Floor
Sacramento, CA 95814

RE: AB 5 (Gonzalez) Worker status – Request for Veto

Dear Governor Newsom:

The R Street Institute respectfully asks for your veto of Assembly Bill 5, which would require employers to reclassify many independent contractors as employees. R Street is a Washington, D.C.-based think tank with offices in Sacramento. We promote practical, market-oriented solutions and are involved in efforts to help promote new opportunities for workers in the gig economy.

We appreciate your efforts to address the “Future of Work,” as your new commission is charged with examining. There’s little doubt that California’s economy has left many people behind, and applaud efforts to create an “equitable, sustainable, inclusive economy of the future.” However, we’re concerned that in its efforts to create a better future for workers, AB 5 would jeopardize the work that they currently do in the present.

More than 8 percent of California workers have contractor or freelance status. Surveys show that the vast majority of them appreciate the flexibility that these opportunities offer. Not everyone wants a 9-5 job in a cubicle or a factory. This legislation will disrupt their livelihoods and could lead to a vast contraction in the number of available positions. It threatens the existence of many companies that provide valuable services, but which are built around a contractor model.

We agree on the need to find ways to provide better benefits for independent workers. Instead, this legislation threatens many people’s livelihoods, even as it exempts industries that simply have the most political clout. We urge a veto of this measure and an attempt next year to create an approach that improves people’s economic future without harming their current economic prospects.

Thank you for your consideration.

Sincerely,

Steven Greenhut

Western Region Director