Musicians' Groups, California Legislators Propose Gig-Economy Law Amendment

The California state Capitol building - Getty -H 2016
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The legislation would exempt the majority of musicians seeking to collaborate in the recording studio from having to enter into employer-employee relationships.

Top musicians' groups and two California legislators have unveiled a proposed amendment to the controversial gig-economy law AB 5 to ease its impact on music professionals.

The amendment — which represents a compromise between AB 5 author Assemblywoman Lorena Gonzalez, Majority Leader Ian Calderon and several musicians' rights groups, including the Recording Academy and the American Federation of Musicians — exempts the majority of musicians, vocalists, recording artists, composers, songwriters, lyricists, musical engineers, sound mixers and record producers from being subject to AB 5's strict "ABC Test" to determine their worker classification in the recording studio. Instead, the former standard, called the "Borello test," would decide whether they are an employee or an independent contractor.

On live performances, the amendment says that musicians working with one another can also be classified under "Borello" standards unless a musical group is the main act at a concert with more than 1,500 attendees or is performing at a festival with more than 18,000 attendees per day. The "ABC Test" would continue to apply to musical groups that often perform at theme parks; performers in symphony orchestras; tour performers; and performers on a musical theater production. The amendment also allows unions to continue to negotiate on behalf of music professionals.

"It's a great result. I think it strikes a perfect balance between protection and industry," Manatt Entertainment partner Jordan Bromley, the lead negotiator on behalf of musicians' groups for the proposed amendment, tells The Hollywood Reporter of the decision. "And as a representative of musicians ... and as a member of the board of directors of Music Artists Coalition, we're very happy with where we landed."

"For nearly a year and a half, I have engaged with individual musicians, the recording industry, and unions representing musicians and artists to understand how the California Supreme Court’s Dynamex ruling and AB 5 has impacted their work," Assemblywoman Gonzalez said in her own statement. "In partnership with Majority Leader Calderon, I’m pleased to say that representatives from across the music landscape have reached a consensus to move the industry forward when it comes to workplace rights. When the Legislature reconvenes, new amendments will acknowledge and add to the existing flexibility California has allowed in the music industry while protecting the right for musicians to have basic employment protections just like every other worker."

Ever since AB 5 was signed into law last September, the music industry has decried the potentially lethal effect the law could have on the music business in California. Pre-exemption, if a musician was under the "control and direction of the hiring entity" in their performance and/or that person was doing work in "the usual course of the hiring entity’s business," then the individual would need to be classified as an employee and receive employee benefits. Before, most musicians worked on a gig-by-gig, independent-contractor basis.

Had AB 5 remained in place unchanged, says music lawyer and owner of LaPolt Law P.C., Dina LaPolt, "this would have absolutely pushed the music business out of the state of California, which is bad for musicians who are so heavily concentrated in California, especially L.A., which is the hub of the music business — that would have completely changed over the next few years."

Musicians' groups including the Recording Industry Association of America, American Association of Independent Music, Music Artists Coalition, Independent Music Professionals United, Songwriters of North America, American Federation of Musicians, the Recording Academy, International Allegiance of Theatrical Stage Employees, Screen Actors Guild and Teamsters have negotiated with California legislators since at least February 2019 to come to a resolution. If passed, the amendment will go into effect on Jan. 1, 2021.

The proposed musician amendment follows a similar effort to change the way AB 5 affects freelance writers, editors and photographers, which was first announced in February.