<\/p>\n\n\n\n
HAPPY NEW YEAR FROM THE COMMITTEE!<\/p>\n\n\n\n
THREE AB5 VIEWS<\/p>\n\n\n\n
[Firstly, what are the ABC rules?: a new test to determine whether a worker is an independent contractor or an employee. <\/p>\n\n\n\n
A worker is an independent contractor ONLY if the company hiring the worker establishes the following:<\/p>\n\n\n\n
Below are\nthree views of AB5. Make sure to pay particular attention to the statistics in\nAri Herstand\u2019s article. They are quite eye opening.<\/p>\n\n\n\n
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I. THE INDEPENDENT MUSICIANS VIEW<\/p>\n\n\n\n
To the esteemed members of the California Assembly and Legislature:<\/p>\n\n\n\n
AB5 will have a devastating and catastrophic impact on independent musicians,\ntheir livelihoods and the music industry in general in California. Musicians\u2019\nbusinesses operate in a substantially different way than many other types of\nindustries, and the changes brought by AB5 are not sustainable with our\nbusiness model.<\/p>\n\n\n\n
Each year, a musician may be booked by numerous entities or individuals\nand may also contract numerous individuals. Musicians often wear different\nhats; as performers on their own and other musicians\u2019 recordings and live\nperformances, as session musicians, as instructors, as producers, as composers\nand songwriters, as bookers and as bandleaders.<\/p>\n\n\n\n
For example, in a given week, a musician might:<\/p>\n\n\n\n
-Perform on live gig under their own name and two in other bands.<\/p>\n\n\n\n
-Teach eight private lessons.<\/p>\n\n\n\n
-Produce three songs for a client, involving booking a studio and session\nmusicians.<\/p>\n\n\n\n
-Record their own songs with other musicians.<\/p>\n\n\n\n
-Subcontract musicians and play at a wedding.<\/p>\n\n\n\n
In just one week, the musician would be both employer and employee .numerous\ntimes over in the AB5 model. This is exponentially true over the course of a\nyear. Using the Uber and Lyft model that precipitated AB5, imagine there are\nthousands of different rideshare companies. A driver might work for multiple\ncompanies for only a few hours a week or month. That same driver also owns a\nrideshare Californiacompany that uses\nother drivers. This imagined scenario closely resembles musicians\u2019 situations.<\/p>\n\n\n\n
Most professional musicians in California do not have assistants, lawyers,\nagents or business managers. Most of us make a modest living in order to pursue\ntheir craft. The costs associated with AB5 would be crippling. Incorporating or\nbecoming an LLC is prohibitively expensive, and payroll companies do not work\nwith our business model. If one musician is contracted by another to perform on\none song on a record, and the booking musician must go through a payroll\ncompany, they must pay fees for that one musician for the entire year.\nMultiplied by the amount of times one musician can contract other musicians throughout\nthe year, the costs and logistics become overwhelming for an individual.<\/p>\n\n\n\n
Most musicians in California are not celebrities. We are members of the\nworking class. We have worked diligently to pursue our art, build up clients\nand nurture professional relationships so that we may continue to create and\nentertain. We work for and with each other on projects. There is no company or\ncorporate structure. Our work is on a per-project basis and frequently the\nperson booking us is a fellow musician. If a musician is contracted to play one\nsong on an album, they recognize that there is no promise of future employment.\nThey cannot claim unemployment against their colleague that booked them.<\/p>\n\n\n\n
Being a professional musician is, by definition, a freelance occupation.\nThe term \u201cgig\u201d was coined in the 1920\u2019s by Jazz musicians. Musicians cannot stop\nfreelancing and at \u201cBlank Music Company\u201d since it doesn\u2019t exist. Music organizations\nthat do offer secure, full-time employment and benefits, such as symphony\norchestras, are blindingly difficult to get into. First-call union session\nmusicians in Los Angeles can enjoy an excellent living and benefits, but the\nlines for those recording sessions are long and few musicians will ever make\nthe bulk of their living this way. Most of us piece together our living from\nnumerous opportunities throughout the year, which we welcome and want to do.<\/p>\n\n\n\n
We are, frankly, terrified of AB5 as it allies to us. The ABC test is so\nstrict and the fines are so high that many entities will simply stop using\nCalifornia musicians altogether. Clubs will switch to recorded music rather\nthan use payroll companies, composers will use sampled instruments rather than\nlive players and much of out business will simply move to Nashville, New York\nor Atlanta. The Los Angeles jazz scene has, in the last several years,\nsurpassed that of New York in terms of creativity and visibility, but is not a\nmoney-making venture and is vulnerable in that aspect. Jazz clubs, with their\nlimited resources, could become so over burdened that they may be forced to\nclose, which would be a great loss to the state of California, both\neconomically, artistically and in terms of its newfound reputation as a hub for\ncreative music.<\/p>\n\n\n\n
We are aware that exemptions for musicians were discussed and ultimately\nnegated by the AFM, but the AFM represents only a fraction of musicians in\nCalifornia and does not speak for the majority of us. Most independent\nmusicians were not aware of the existance of AB5 or how it could impact them\nuntil after it\u2019s passing. And most are still not. We appreciate your efforts to\ngo after billion-dollar conglomerates such as Uber and Lyft, but the reality is\nthat independent musicians are much closer to the drivers economically. Many of\nthe individuals in the professions that were granted exemptions \u2013 doctors,\nlawyers and architects \u2013 make many times over the salaries of average working musicians.\nWhy not grant independent musicians, who need it even more, the same exemption?<\/p>\n\n\n\n
We are proud to call ourselves independent California musicians. We want\nto continue as independent contractors so that we may continue to pursue our\ncraft in the best possible way for us. We would be grateful for an exemption\nthat recognizes the unique nature of our field and allows us to continue to\nmake the best music we possibly can.<\/p>\n\n\n\n
Sincerely<\/p>\n\n\n\n
A group of independent professional California musicians\nseeking an AB5 exemption.<\/p>\n\n\n\n
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II. A LOCAL 47 MEMBER\u2019S VIEW<\/p>\n\n\n\n
Dear\nEditor,<\/p>\n\n\n\n
So the\nauthor of AB 5, Assemblywoman Lorena Gonzalez tweeted that \u201cWe were very\ndisappointed the music industry and entertainment unions did not get to an\nagreement.\u201d <\/p>\n\n\n\n
The\nOfficers and Executive Board of Local 47 know that support of AB 5 will\ndisenfranchise the majority of the membership that makes their living as\nindependent contractors. The union sees this legislation as an\nopportunity. The Union is in the union business. AB 5 will allow the arm of\nstate government to decimate and eliminate the union\u2019s competition in Los\nAngeles when it comes to recording and production\u2026or so they might hope. They\njust don\u2019t want to be blamed.<\/p>\n\n\n\n
Union\nsupport is often the way many of the politicians get elected. President Acosta\nhas even opined that since the law will bring more revenue to the state,\nperhaps it will be time to ask the state for more money for the arts. <\/p>\n\n\n\n
President\nJohn Acosta presents himself as representing 6200 members in Local 47\nAFM. However, the overwhelming majority of the Union\u2019s efforts in\nSacramento focus on tax credits for media recording that benefit only a small\nfraction of the membership known as the Recording Musicians of America, a once\npowerful and controlling players\u2019 conference within the AFM. At last count\nRMALA = 457 members.<\/p>\n\n\n\n
There\nmight be quite a change in the perception of the Local if Sacramento and the LA\nFED knew that the Officers and the Board got elected with less than 365 votes.\nThat is probably about the number of rank-and-file musicians that actually make\na living solely under union contracts. <\/p>\n\n\n\n
Local 47\nMember<\/p>\n\n\n\n
[EDITOR\u2019S COMMENT: We believe the number of those making a full living solely off union work is far smaller than 365]<\/p>\n\n\n\n
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III. ARI HERSTAND AB5 MEETING ARTICLE<\/p>\n\n\n\n
I met with AB 5 Author Assemblywoman Gonzalez. Here\u2019s How it Went.<\/p>\n\n\n\n
12-18-2019<\/p>\n\n\n\n
By Ari Herstand<\/p>\n\n\n\n
Yesterday morning 5 musicians and I piled into my car at 7am (!!) and we\nmade the excursion down to San Diego to Assemblywoman Lorena Gonzalez\u2019s office\nto discuss the effects of California\u2019s new law AB5 on the music community. <\/p>\n\n\n\n
If you\u2019ve been living under a rock the past couple weeks,\nread my piece: California\u2019s Music Economy Is About To Crash<\/a><\/p>\n\n\n\n After my article finally got the conversation started about\nhow AB5 will be catastrophic for the music industry in California, I was\noffered a meeting (via Tweet) by Assemblywoman Gonzalez – who wrote the bill\nand got it passed. It\u2019s funny how effective Twitter is these days in politics.\nAsk a musician the last time they logged into Twitter and most will say not\nsince the Obama era, but man, if Twitter ain\u2019t where politics lives and dies.\nWelp, it got me a meeting. <\/p>\n\n\n\n Now as an update on what went down since my article was\nposted just about a month ago, the RIAA, A2IM, MAC and AFM<\/a> finally got back to the table to continue negotiations on\ncoming up with language to exempt music professionals for a potential clean up\nbill. A petition was started<\/a>\nwhich garnered over 2,500 signatures in 24 hours. (SIGN IT) The A-list working\nmusicians\u2019 app Jammcard<\/a> ran a survey of its\nmembers about AB5 and got some startling results back (more on this in a\nmoment), Assembly members and Senators were FLOODED with letters, calls and\ntweets from the music community of California (thank you!) and I got a meeting\nwith Assemblywoman Gonzalez. <\/p>\n\n\n\n Also, someone wrote a critical response on Medium to my article entitled,\nAri\u2019s (not so good) Take: A Measured Response.<\/p>\n\n\n\n Which he tweeted to Assemblywoman Gonzalez and she retweeted\nexclaiming \u201cso well written!\u201d In this piece, the author, Nathan York Jr.,\nbasically says that no one should fret because this won\u2019t be enforced. And\nincluded the letter written by AFM Local 7 Vice President Edmund Velasco back\nin September when the law was signed – which contained extremely misleading,\nnay, false information about the effects of AB5 on working musicians. Either\nVelasco flat out lied to his members to save face and preempt the backlash or\nwas just misinformed and passed along that misinformation. Unfortunately, this\nis what some musicians in support of AB5 are basing their opinions off of. And\n10 different attorneys say that Velasco is flat out wrong and spread\nmisinformation. So there\u2019s that. <\/p>\n\n\n\n Nearly everyone (well all 5 musicians) who are in favor of AB5 (as it\nrelates to music) bring up enforcement. <\/p>\n\n\n\n They say that we don\u2019t need to worry because this will never\nbe enforced. They are basically saying that we should just not comply with it\nand break the law. And that it\u2019s actually a good thing because it gets us\ncloser to forming a NEW union for musicians. A couple things about this\nargument: 1) intentionally not complying with the law hoping that no one will\ncome after you is no way to run your business and 2) enforcement comes in many\ndifferent forms. Will the Attorney General of California be knocking on indie\nmusicians\u2019 doors? Probably not. But the EDD (Employee Development Department)\nvery well could. And do! One of the members in our meeting was recently audited\nby the EDD where they were checking to see if the people he issued 1099s were\nproperly classified. So enforcement actually does happen. And not only that, if\nyou have a disagreement with someone you hire for a gig and they really want to\nfuck you, they very well could sue you and bring up your non-compliance with\nthis law. And once they bring this suit against you, you\u2019ll now have a\nspotlight on you and will be an easy mark for the EDD. <\/p>\n\n\n\n Back to the meeting at hand. <\/p>\n\n\n\n I organized a group of 5 musicians to head down to Assemblywoman\nGonzalez\u2019s office in San Diego to plead our case: <\/p>\n\n\n\n Elmo Lovano (drummer and founder of Jammcard), Raquel Rodriguez (singer, songwriter, studio owner), Nick Campbell (bassist), Danica Pinner (cellist, string quartet\nmember), Alicia Spillias\n(violinist, string quartet owner). My meeting was confirmed just about a week\nago and the group and I had a very active email thread going, preparing for\nthis meeting. On the drive down we talked the entire way down (not a single\nsong was played!) prepping for what we were expecting was going to be a\ncontentious meeting.<\/p>\n\n\n\n But let’s backup for a second. <\/p>\n\n\n\n The night before, I was at School\nNight<\/a> in LA. Nick Campbell came up to me\nafter he finished playing his set and said \u201cHey Ari, you know that guy who\nwrote the response to your article? Well, apparently Assemblywoman Gonzalez\ninvited him to our meeting!\u201d Nick was tipped off by his friend Martin Diller who Nathan York (the\nwriter of the \u201cMeasured Response\u201d piece) asked to join him for this. Martin had\nbeen similarly critical of my article in my comments section so apparently\nNathan saw that and found an ally to join him. Martin called Nick as a courtesy\nbecause he figured we were in the dark about this and didn\u2019t want us to be\nstartled. Martin and Nick are friends and they do gigs together.<\/p>\n\n\n\n Assemblywoman Gonzalez did not give me a heads up about them joining our\nmeeting. <\/p>\n\n\n\n I\u2019m not exactly sure why she brought them into our meeting –\nespecially without telling us about it. Maybe she was hoping for an all out\nbrawl in her office. Maybe her Pay-Per-View subscription had expired and she\nwas in need of some head to head entertainment. Regardless, it was a little odd\nthat she surprised us with this. It could have completely derailed the meeting\nand our agenda. Maybe that was her intention? I\u2019m not sure. <\/p>\n\n\n\n Luckily, we were tipped off. So on the drive down, literally\n45 minutes before our meeting, we all got on a call together to attempt to work\nout our differences over the phone through stop and go traffic on the 5 to\nattempt to present a unified front going into the meeting. After 45 minutes of\ndiscussion, we realized we are actually much more closely aligned than our\nconflicting articles and comments would make it seem. All we needed was some\ntime to hash it out. Luckily we were able to do that BEFORE walking into her\noffice. Again, though, why she didn’t give us a heads up to have this\ndiscussion in advance and help everyone better prepare for the meeting is quite\nconfusing. <\/p>\n\n\n\n The 9 of us (oh, Nathan and Martin brought an attorney with\nthem. Cool.) piled into Assemblywoman Gonzalez\u2019s office and I explained to her\nthat we are all in support of the intentions behind AB5 – to help workers who\nare being taken advantage of by greedy corporations – but unfortunately this\nwill be absolutely catastrophic to our business. The added costs we will incur\nto comply with this law will crush us. We went around the room and explained\nhow we each run our business. How most of us are both \u201cworkers\u201d and\n\u201cemployers.\u201d Oftentimes on the same gig. Gonzalez asked very pointed questions\nand genuinely seemed to want to learn more about how we operate our business.\nShe was very engaged and it was actually a really excellent conversation. <\/p>\n\n\n\n Nick mentioned how his accountant told him he could expect a 20% increase\nin costs for every musician he hires. My accountant estimated that it would cost\nan additional $6,000 or so a year to get fully setup and comply with this. <\/p>\n\n\n\n Gonzalez pushed back a bit and said that the\n“costs” are just being transferred – that someone has to pay these\ntaxes and before it was the contractor and now it will be the employer. Which\nis not accurate. Most of these costs are not taxes, they are additional costs\nto comply. It\u2019s the $300\/mo payroll companies charge (you have to have a\npayroll company to withhold the proper taxes and issue payment). It\u2019s payroll\ntax for each \u2018employee.\u2019 In any given year, I hire 40 or so music professionals\nfor various gigs and studio sessions. Oftentimes for one-off gigs where they\u2019re\npaid $100-200 or so. There is an added payroll tax for every single employee.\nNot to mention that payroll companies are not setup for one-off gigs and charge\nextra fees for short term \u2018employees\u2019 like this – with an additional cost to\nadd a new employee. Previously, it cost me around $550 to file tax returns as a\nsole proprietorship with my accountant. As a corporation it will cost about\n$2,500. To register and maintain an LLC or S-Corp costs a minimum of $800\/year\n(to be able to actually put people on payroll and W2 them).<\/p>\n\n\n\n +9 Things Singer\/Songwriters Need to Know About Hiring\nFreelance Musicians<\/a><\/p>\n\n\n\n Not to mention that with the new Trump tax law, W2\u2019d employees are no\nlonger able to itemize their expenses like independent contractors are. <\/p>\n\n\n\n Since most musicians will have multiple (oftentimes 20+)\n\u201cemployers\u201d in any given year – none of whom cover our expenses like equipment,\nrehearsal studios, recording studios, software, hardware, travel, lodging,\nfood, etc. – we need the ability to write off these expenses. But if we are\nforced to be W2\u2019d employees, we can\u2019t do that anymore. <\/p>\n\n\n\n This is honestly just scratching the surface. So there are actually quite a lot of added costs (and\ndiminished benefits). What middle class musician can afford an additional\n$6,000 a year without it putting a serious strain on them? I honestly don\u2019t\nknow any.<\/p>\n\n\n\n Elmo shared the results of the Jammcard survey that was sent to their\n4,000 California members (all vetted working music professionals):<\/p>\n\n\n\n Are you a member of the AFM\n(musicians union)?<\/p>\n\n\n\n 64.8% – No I’m not <\/p>\n\n\n\n 17.8% – Yes I am <\/p>\n\n\n\n 13.2% – I used to be <\/p>\n\n\n\n 2.4% – I am but I’d like not to be<\/p>\n\n\n\n 1.7% – I don’t know what the AFM is <\/p>\n\n\n\n Do you make the majority of your\nincome from union work or non union work?<\/p>\n\n\n\n 97.6% – Non union<\/p>\n\n\n\n 2.4% – Union<\/p>\n\n\n\n How do you prefer to be taxed as a\nmusic professional?<\/p>\n\n\n\n 76.4% – 1099 (freelance\/independent contractor) <\/p>\n\n\n\n 15.6% – W2 (employee)<\/p>\n\n\n\n 8% – I don’t know Do you support California AB5 for\nmusic?<\/p>\n\n\n\n 66.7% – I do not support it <\/p>\n\n\n\n 8% – I support it <\/p>\n\n\n\n 25.3% – I don’t know what it is<\/p>\n\n\n\n All in all, it worked out to be a very healthy discussion and she\nexpressed willingness to create a \u2018clean up bill\u2019 and add clarification for the\nmusic community – essentially carving out certain music professionals from the\nlaw. <\/p>\n\n\n\n She explained that come January 6th when the Assembly is\nback in session, they can get to work on drafting language for the new Bill and\nonce the language is agreed upon by all interested parties (us, RIAA, A2IM,\nAFM), they will vote on it. She did say that it will be voted on before\nSeptember 1st (the deadline), but we shouldn\u2019t expect it much sooner – these\nthings take time. <\/p>\n\n\n\n +22 Musicians Who Made It After 30<\/a><\/p>\n\n\n\n But, and this is a huge Kardashian but, if this clean-up\nbill is passed, it will be retroactive.\nMeaning, even though nearly every musician in California will be in breach of\nthis law come January 1st, this clean-up bill will essentially wipe away these,\nuh, crimes. So even though literally thousands of musicians will be breaking\nthe law come January 1st, no one will be able to come after us once this\nclean-up bill is (hopefully) passed because it will in essence change the law\nfrom when it was enacted (January 1, 2020). <\/p>\n\n\n\n It was absolutely wonderful to meet with Assemblywoman\nGonzalez with my fellow musicians and exercise our rights a bit. And I\u2019m\nexcited to continue to work with her to get this thing passed so musicians can\ncontinue to thrive in the state of California. <\/p>\n\n\n\n It seems like we\u2019re moving in a positive direction, but we\nneed to keep up the momentum to get us over the finish line. So! Please hit up\nyour representatives and let them know that you\u2019d like an exemption for music\nprofessionals. <\/p>\n\n\n\n You can find out who your representative is here<\/a>.<\/p>\n\n\n\n About the Writer<\/p>\n\n\n\n Ari Herstand<\/em><\/strong><\/a> (pronounced Ar*ee Her*stand) is a Los Angeles based musician and fronts the band <\/em><\/strong>Brassroots District<\/em><\/a>. Follow him on <\/em><\/strong>Instagram,<\/em><\/a> <\/em><\/strong>Twitter<\/em><\/a> and <\/em><\/strong>Facebook<\/em><\/a>. <\/p>\n\n\n\n
\nSo not complying, is not smart business. <\/p>\n\n\n\n
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