California language service companies and freelancers in limbo after AB5

With California cracking down on the widespread practice of using independent contractors to skirt labor laws, freelance linguists in the state are feeling the fallout, their livelihoods in limbo as the new year looms.

Landmark labor law State Assembly Bill 5 (AB5), as controversial as it is sweeping, is poised to reclassify potentially thousands of independent contractors as employees starting Jan. 1, 2020, after Gov. Gavin Newsom signed it into law in September.

“Worker status: employees and independent contractors,” also called the “gig worker bill,” thwarts the longtime common practice, in which companies and businesses in California turn to independent contractors to avoid costs associated with employees. That worker misclassification costs the state roughly $7 billion in lost payroll tax revenue per year, according to the California Department of Industrial Relations estimates.

Now, to the applause of labor groups, the state has raised the bar on the definition of workers that companies can call independent contractors. The move marks a major change that will alter the future of freelancers in the state and likely beyond as industry experts warn it will drive jobs out of state.

AB5 codifies the State Supreme Court decision in Dynamex Operations West v. Superior Court of Los Angeles in 2018, which tightened the definition of independent contractors. It instituted the ABC test. Under this new standard, workers will only be considered an independent contractor if the worker is:

A) Free from company control and direction in the performance of services;
B) Doing work not integral to company business; and
C) Regularly engaged in independent business or trade of the same nature

Those who do not meet all three conditions will be classified as employees. This new standard for independent contractors is much stricter than the previous Borello guidance.

Lawmakers said the law is intended to protect the labor rights of independent contractors allegedly being “abused” by employers to give them workplace protections. As employees, workers who were formerly classified as independent contractors would receive benefits such as minimum wage, overtime, paid leave, health and unemployment insurance, discrimination protection, and more.

While AB5 is meant to target companies like Uber and Lyft, it has sent the translation and interpretation industry, and similar professions, reeling.

The American Society of Journalists and Authors (ASJA) and the National Press Photographers Association (NPPA) also jointly filed a lawsuit Dec. 17 against the state of California, challenging AB5, which ASJA President Milton Toby called “potentially career-ending” for freelance journalists, writers, and photographers. The lawsuit also alleges that some California freelance journalists have been “blacklisted” by various media outlets.

Lorena Ortiz Schneider of Ortiz Schneider Interpreting & Translation in Santa Barbara, California, told Smartcat AB5 has created “a lot of consternation” in the translation and interpretation industry.

She said the “cookie-cutter definition” of independent contractor will only hurt the industry, which primarily relies on the contractor model and a certain “symbiosis” between client companies and freelance linguists. “By and large, our profession is composed of independent contractors,” she added. “Part of that is due to supply and demand, subject matter expertise, geolocation, and more.”

Ortiz Schneider estimated there are over 5,000 certified translators and interpreters in California, noting that the majority of them want to remain independent. “This is going to harm California linguists,” she said, adding that some independent contractors have already received cut-off notices.

“We continue to listen to and truly hear people who are afraid and are losing business or income because of the changes made in AB5,” bill author State Assemblywoman Lorena Gonzalez (D-San Diego) tweeted Dec 18. “We don’t want anyone to be afraid, or suffer income loss. And we will continue to clarify and work on this bill.” She stood firm, however, that labor laws must be corrected.

“It’s disruptive to the industry, an industry that has been operating with the independent-contractor model for decades,” said Stephanie Fiorito, vice president of Continental Interpreting Services (CIS) in Yorba Linda, California. The company offers interpretation and document translation services, and primarily provides onsite legal interpreting via its vendor network. “It’s a model that works; it’s not a model that’s broken.”

Industry experts note there is already a shift of jobs to contractors out of state. Additionally, companies outside of California, such as New York-based Vox Media, are taking preemptive action.

Vox announced Dec 16 it plans to terminate contracts with over 200 California independent contractors who have run SB Nation’s California blogs since 2003.

John Ness, executive director of SB Nation, wrote in a blog post that the new law, with its restrictions capping written submissions at 35 per year, “makes it impossible” for the blog network to continue with its current structure.

Gonzalez fired back on Twitter, claiming Vox is “using AB5 to deflect anger towards [California].”

Idea Translations co-founder and director Sergio Atristain called it “a lose-lose situation,” warning that AB5 will hurt the way translation and interpretation companies do business, as most operate on a project-by-project model. “If we are forced to reclassify contractors as employees, clients should expect a large increase in costs, lower capabilities in terms of services and language pairs, and limits to the extent of service offerings,” he added.

Only time will tell if the popular saying, “As goes California, so goes the nation,” is true. However, experts expect it will, and the landmark law will have far-reaching implications beyond the progressive state.

Ortiz Schneider pointed out New York and New Jersey following similar suit: “It would be great if everybody would follow what’s happening in California and take an interest in it, because there are bills similar to AB5 cropping up in the rest of the country.” She urged those in other states to become involved and more proactive sooner to gain an industry exemption on the ground floor from the get-go.

“This law only applies in California right now, but of course California legislation often sparks the passage of similar legislation in other states or nationally, which will continue to shrink the pool of available talent if translators and interpreters are not exempted from these laws,” said Laura Burian, dean of the Graduate School of Translation, Interpretation and Language Education at the Middlebury Institute of International Studies at Monterey. “If doctors, lawyers, real estate agents, travel agents, and manicurists deserve exemption, why not professional translators and interpreters?”

Ortiz Schneider founded the Coalition of Practicing Translators and Interpreters of California (CoPTIC) in September in response to AB5. “The ultimate purpose of the coalition is to win an exemption for all language professionals in 2020,” she said.

The bill exempts certain professions, including real estate agents, insurance agents, engineers, architects, financial advisers, lawyers, doctors, dentists, and more — even hairdressers.

Ortiz Schneider argued for a similar exemption for linguists, explaining they differ from true gig economy workers such as Uber and Lyft drivers. She noted that anyone with a driver’s license can work for Uber, but not everyone can translate and interpret, as it requires a specific skill set and knowledge similar to lawyers and accountants.

Other industry experts agreed translation and interpretation require specialized expertise that calls for a diverse pool of talent. Ortiz Schneider put it simply: “A mental health interpreter can’t go on a patent law case.”

Fiorito also called the exemption “the ideal solution” to AB5.

The coalition has been holding informational meetings focusing on “constituent-driven advocacy,” encouraging any and all stakeholders to make an appointment to go see their district legislator about an AB5 exemption for linguists. “I feel confident that if we and all of our colleagues roll up our sleeves and participate, that our voices will be heard, and we will win an exemption,” Ortiz Schneider said.

California freelancers are already feeling the effects. Many companies are passing the buck to the contractors, essentially requiring them to incorporate or lose business. Freelancers say they have received notices terminating their independent contracts starting next year.

“It’s sharply limiting the number of people that language service providers can hire as independent contractors,” Burian said, adding that many of her colleagues have lost work in the face of the Jan. 1 enforcement date. “I worry that this will mean a reduction in the availability of high-quality translation and interpretation services, particularly for languages of lesser diffusion.”

Additionally, incorporating would be costly and complicated. Another California freelance English-French translator who wished to remain anonymous said: “That’s an easy way for companies to get around the law, and the only loser here is the freelancer.”

Time will show if any of those fears are justified. In any case, we’ll keep you posted about any developments, so make sure to subscribe to our blog to stay tuned.