Dive Brief:
- Vox's SB Nation will end its contracts with California-based independent contractors, John Ness, the publisher's director of team brands, announced Dec. 16.
- Ness said the decision was driven by the recent passage of California's Assembly Bill No. 5. "That new law makes it impossible for us to continue with our current California team site structure because it restricts contractors from producing more than 35 written content 'submissions' per year," Ness said. SB Nation said it will replace the contractors with new full-time or part-time employees.
- Vox Media did not immediately respond to a request for comment.
Dive Insight:
AB-5 takes effect Jan. 1, 2020, but SB Nation's move likely doesn't reflect how most businesses operating in California will prepare for implementation, according to Steven Katz, a Los Angeles-based partner at Constangy Brooks, Smith & Prophete.
In an interview with HR Dive, Katz said that while most newsrooms have a good understanding of the distinction between editorial personnel and freelancers, he suspects that SB Nation publications have a higher proportion of content produced by independent contractors compared to other publications. "My suspicion is this doesn't look like the typical newsroom," he said.
SB Nation's decision not to place all of its freelancers in minimum-wage roles also is "interesting and maybe telling" about the degree to which the company relied on independent contractors, Brian Dolan, founder and CEO of talent platform WorkReduce, told HR Dive in an interview. "That says these people are pretty substantially working for SB Nation."
Earlier this year, the U.S. District Court for the District of Columbia certified a class of SB Nation writers and editors who sued the publisher, alleging it misclassified them as independent contractors to avoid paying them minimum wage and overtime, Bloomberg Law reported.
According to AB-5's text, the law excludes from its independent contractor designation any "freelance writer, editor or newspaper cartoonist" that provides an employer more than 35 submissions per year. AB-5 defines "submission" as one or more items submitted by a freelance journalist that pertain to a specific event or topic, are provided for in a contract that defines the scope of the work and are accepted by a publication or company and published or posted for sale.
California lawmakers passed AB-5 with the intent of addressing alleged misclassification of workers and codifying the "ABC test" established by the state's supreme court in a 2018 ruling. But legislation like AB-5 are "blunt instruments" that make it difficult for lawmakers to actually address issues like misclassification, Dolan said; "They're putting a very blunt thing in place. When you do that there's going to be fallout." But he noted there are legitimate concerns about companies skirting wage protection laws and other regulations by misclassifying workers.
Platforms like Uber, Lyft and DoorDash figured prominently in the initial debates over AB-5 and the law has employers in the state taking a second look at their classifications, Katz said; but he added that he hadn't yet seen other companies make an announcement like SB Nation's.
Dolan noted that Massachusetts — the state in which WorkReduce is based — has a similar classification test. He said he suspects other states may consider similar laws in the future. "If that's true, I think business owners should be thinking about much more aggressively moving people to employee status."
Katz advised employers affected by AB-5 to clearly communicate to workers any changes made as a result. "You just have to be straightforward about how the law has changed, and the business reasons for making a change," he said.
