California Freelancers?

[tlsanders]

I'm hearing in freelancing groups that California freelancers are blocked from signing up with Upwork because of AB5 and some existing accounts were suspended or terminated based on location. But, I can't find anything in the rules about this, and when I search freelancers I find a lot of active California freelancers. Can someone please clarify what the current policy is?

[a_lipsey]

I highly doubt this to be the actual reason someone was suspended. AB5 has no effect on many types of consultants, and some of us are, in fact, incorporated, so I would highly doubt Upwork is suspending or banning based on location alone. Furthermore, what if the freelancer decides to move and their account is banned previously? That seems like a lot of work for Upwork to do when it is not Upwork who is hiring or responsible for businesses' hiring practices.

Especially since there are moves to repeal AB5 already, why would they move to do such a thing? I'm curious to hear from Upwork. I'd also think there would be some kind of notification to California freelancers before this happened, especially since hiring my S Corp to do work is different than hiring me as a freelancer.

ETA: Upwork would also have to be barring California companies from hiring, and they aren't doing that.

[kochubei_valeria]

Hi Tiffany,

Clients are still able to engage California-based freelancers through Upwork. So no, California-based freelancers aren't blocked from signing up with Upwork. In some cases, clients will have to look at whether the worker is an employee under the new standard.  In cases where their freelancer should be classified as an employee, clients can leverage Upwork Payroll and other tools to ensure they can start or continue engagements with freelancers within the bounds of California law.

[tlsanders]

Thank you, Valeria. 

Amanda, what I am hearing about is a specific notice that referenced AB5. I'm thinking that maybe it was something coming from a client who had opted not to consider California freelancers. 

[prestonhunter]

From what I have read in various news articles, many clients and businesses now choose to not hire freelancers from California due to AB5.

This is not directly related to the exodus of businesses from California, which has primarily been for economic reasons.

[a_lipsey]

Thanks for that clarification, Tiffany. I can understand why some companies would not want to hire independent freelancers where there might be ambiguity regarding this law. My ears perked up at the Upwork banning part.

This has been a consideration for me in shifting my business to an S Corp, since I provide B2B services and am in a field that is overseen by the CA Secretary of State. There is misconception about who this law affects (that it affects everyone). Unwork refers to us all as freelancers, and I think it's important to acknowledge that this terminology is Upwork specific. I do not call myself a freelancer. I am a consultant who is employed by a consulting firm that is incorporated. I'm not a "gig worker" and many of us are not.

I hope that we will be successful in repealing this law.