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When Using Independent Contractors Goes Too Far | CA AB-5

When Using Independent Contractors Goes Too Far | CA AB-5

I’m a huge proponent for Independent Contractors and the “Gig Economy.” But what happens when using independent contractors goes too far? You get CA AB-5.

Like all good things, there’s a dark side. For the Gig Workers, there are some who exploit the concept to the extreme. 

Some roles are much better, filled with an outside perspective. Some don’t warrant a full-time employee. Other functions may need specialized expertise that doesn’t fit a traditional role and need someone who isn’t part of the “this is how we’ve always done it” push back from the rest of the team. 

Certain people are not built to be full-time employees and do their best work for businesses when they’re free to choose how and where they work and for whom they work. 

The above is where the Gig Economy and Independent Contractors thrive. It creates happier people (society needs a lot more of those) and better-served businesses.

When the concept is exploited to save on benefits, payroll taxes, and shimmy around employer responsibilities and employee rights, the government has to step in and throw a wrench in the system. 

European countries already have rules against exploiting the Gig Economy, but now California is stepping up to the plate. Companies like Lyft and Uber have been in the crosshairs and helped instigate California’s AB-5

When we need the government to step in, things often go off-kilter. Bills are written without a real on the ground perspective and make things difficult for the very people they’re trying to help. The wording is most often ambiguous and leaves people spending more time figuring out the laws than running their businesses. 

I’m not a fan of over-regulation of businesses, however, when businesses don’t regulate themselves with integrity and fair play, government needs to step in. 

How do we get around more government regulations?

As a business leader yourself, stop patting other business leaders on the back for exploiting people and concepts that work beautifully for millions of people. Peer pressure has a lot to do with a good thing gone bad and the need for burdensome regulations. 

Don’t like more government stepping in to regulate your business? As an independent contractor and business owner, neither do I. The best way to avoid that is not to force their hand.

Act right. Treat people with respect for the value they bring to you and your business. Avoid robbing people of dignity and the ability to support themselves. Engage empathy. Stop trying to impress your peers and shareholders with how much money you made at the expense of society and the people who helped you make that money. 

We’re in business to make money. That’s how we keep the lights on. We’re not in business to exploit people, are we?

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