AB 1727 Hurts California Consumers, Workers and Employers

Cross Posted in Fox and Hounds Daily

California employers lead the way in so many important technologies and industries.  The jobs we create fuel our economy and improve lives.  However, many of California’s thriving industries are now in the crosshairs of a legislative proposal that would make it harder for them to work with independent contractors.

Authored by Assembly member Lorena Gonzalez, AB 1727 would allow any group with as few as 10 independent contractors to act in concert to set the prices and terms of their engagement.  This would put a chokehold on small businesses who will be forced to navigate potentially dozens — or even hundreds — of separate bargaining units.  Not only would the end result make life difficult for our job creators, but it would make the cost of goods and services rise dramatically for consumers.

The bottom line is that any service used to connect an independent contractor to someone who wants to hire them—including dispatch services, web sites, apps or any type of mediator—would be required to negotiate with these multiple individual bargaining units.   Companies and consumers who rely on new, creative and cost efficient services provided by independent contractors working in industries such as trucking, delivery, driving, child care, senior care, plumbing, and accounting, just to name a few, would be seriously impacted by this proposal.

From the employee perspective, this law limits workers’ freedom.  For those struggling to make ends meet, the often more flexible hours afforded by independent contracting arrangements can allow them to work on their own schedule.  It will also create a barrier to entry for new workers.  Independent contracting opportunities allow workers to begin earning an income quickly, either as a long-term engagement or a temporary measure while they pursue other opportunities.

On top of all the other regulatory hurdles employers face in California, this proposal threatens the livelihoods of workers who want and need flexibility.  It would disproportionally impact those areas of the state that are still struggling economically.  Consumers would suffer with a smaller pool of contractors who would drive up prices so high that their services would simply become unaffordable.

Policy makers need to stop this job killing legislation.  As opportunities in the new economy expand, we should find common ground to support what works for California’s consumers, its workers and our employers.

 Allan Zaremberg is President and CEO of the California Chamber of Commerce.