Yesterday morning 5 musicians and I piled into my car at 7am (!!) and we made the excursion down to San Diego to Assemblywoman Lorena Gonzalez’s office to discuss the effects of California’s new law AB5 on the music community.
If you’ve been living under a rock the past couple weeks, read my piece: California’s Music Economy Is About To Crash
After my article finally got the conversation started about how AB5 will be catastrophic for the music industry in California, I was offered a meeting (via Tweet) by Assemblywoman Gonzalez – who wrote the bill and got it passed. It’s funny how effective Twitter is these days in politics. Ask a musician the last time they logged into Twitter and most will say not since the Obama era, but man, if Twitter ain’t where politics lives and dies. Welp, it got me a meeting.
Now as an update on what went down since my article was posted just about a month ago, the RIAA, A2IM, MAC and AFM finally got back to the table to continue negotiations on coming up with language to exempt music professionals for a potential clean up bill. A petition was started which garnered over 2,500 signatures in 24 hours. (SIGN IT) The A-list working musicians’ app Jammcard ran a survey of its members about AB5 and got some startling results back (more on this in a moment), Assembly members and Senators were FLOODED with letters, calls and tweets from the music community of California (thank you!) and I got a meeting with Assemblywoman Gonzalez.
Also, someone wrote a critical response on Medium to my article entitled, Ari’s (not so good) Take: A Measured Response.
Which he tweeted to Assemblywoman Gonzalez and she retweeted exclaiming “so well written!” In this piece, the author, Nathan York Jr., basically says that no one should fret because this won’t be enforced. And included the letter written by AFM Local 7 Vice President Edmund Velasco back in September when the law was signed – which contained extremely misleading, nay, false information about the effects of AB5 on working musicians. Either Velasco flat out lied to his members to save face and preempt the backlash or was just misinformed and passed along that misinformation. Unfortunately, this is what some musicians in support of AB5 are basing their opinions off of. And 10 different attorneys say that Velasco is flat out wrong and spread misinformation. So there’s that.
Nearly everyone (well all 5 musicians) who are in favor of AB5 (as it relates to music) bring up enforcement.
They say that we don’t need to worry because this will never be enforced. They are basically saying that we should just not comply with it and break the law. And that it’s actually a good thing because it gets us closer to forming a NEW union for musicians. A couple things about this argument: 1) intentionally not complying with the law hoping that no one will come after you is no way to run your business and 2) enforcement comes in many different forms. Will the Attorney General of California be knocking on indie musicians’ doors? Probably not. But the EDD (Employee Development Department) very well could. And do! One of the members in our meeting was recently audited by the EDD where they were checking to see if the people he issued 1099s were properly classified. So enforcement actually does happen. And not only that, if you have a disagreement with someone you hire for a gig and they really want to fuck you, they very well could sue you and bring up your non-compliance with this law. And once they bring this suit against you, you’ll now have a spotlight on you and will be an easy mark for the EDD.
So not complying, is not smart business.
Back to the meeting at hand.
I organized a group of 5 musicians to head down to Assemblywoman Gonzalez’s office in San Diego to plead our case:
Elmo Lovano (drummer and founder of Jammcard), Raquel Rodriguez (singer, songwriter, studio owner), Nick Campbell (bassist), Danica Pinner (cellist, string quartet member), Alicia Spillias (violinist, string quartet owner). My meeting was confirmed just about a week ago and the group and I had a very active email thread going, preparing for this meeting. On the drive down we talked the entire way down (not a single song was played!) prepping for what we were expecting was going to be a contentious meeting.
But let’s backup for a second.
The night before, I was at School Night in LA. Nick Campbell came up to me after he finished playing his set and said “Hey Ari, you know that guy who wrote the response to your article? Well, apparently Assemblywoman Gonzalez invited him to our meeting!” Nick was tipped off by his friend Martin Diller who Nathan York (the writer of the “Measured Response” piece) asked to join him for this. Martin had been similarly critical of my article in my comments section so apparently Nathan saw that and found an ally to join him. Martin called Nick as a courtesy because he figured we were in the dark about this and didn’t want us to be startled. Martin and Nick are friends and they do gigs together.
Assemblywoman Gonzalez did not give me a heads up about them joining our meeting.
I’m not exactly sure why she brought them into our meeting – especially without telling us about it. Maybe she was hoping for an all out brawl in her office. Maybe her Pay-Per-View subscription had expired and she was in need of some head to head entertainment. Regardless, it was a little odd that she surprised us with this. It could have completely derailed the meeting and our agenda. Maybe that was her intention? I’m not sure.
Luckily, we were tipped off. So on the drive down, literally 45 minutes before our meeting, we all got on a call together to attempt to work out our differences over the phone through stop and go traffic on the 5 to attempt to present a unified front going into the meeting. After 45 minutes of discussion, we realized we are actually much more closely aligned than our conflicting articles and comments would make it seem. All we needed was some time to hash it out. Luckily we were able to do that BEFORE walking into her office. Again, though, why she didn’t give us a heads up to have this discussion in advance and help everyone better prepare for the meeting is quite confusing.
The 9 of us (oh, Nathan and Martin brought an attorney with them. Cool.) piled into Assemblywoman Gonzalez’s office and I explained to her that we are all in support of the intentions behind AB5 – to help workers who are being taken advantage of by greedy corporations – but unfortunately this will be absolutely catastrophic to our business. The added costs we will incur to comply with this law will crush us. We went around the room and explained how we each run our business. How most of us are both “workers” and “employers.” Oftentimes on the same gig. Gonzalez asked very pointed questions and genuinely seemed to want to learn more about how we operate our business. She was very engaged and it was actually a really excellent conversation.
Nick mentioned how his accountant told him he could expect a 20% increase in costs for every musician he hires. My accountant estimated that it would cost an additional $6,000 or so a year to get fully setup and comply with this.
Gonzalez pushed back a bit and said that the “costs” are just being transferred – that someone has to pay these taxes and before it was the contractor and now it will be the employer. Which is not accurate. Most of these costs are not taxes, they are additional costs to comply. It’s the $300/mo payroll companies charge (you have to have a payroll company to withhold the proper taxes and issue payment). It’s payroll tax for each ‘employee.’ In any given year, I hire 40 or so music professionals for various gigs and studio sessions. Oftentimes for one-off gigs where they’re paid $100-200 or so. There is an added payroll tax for every single employee. Not to mention that payroll companies are not setup for one-off gigs and charge extra fees for short term ‘employees’ like this – with an additional cost to add a new employee. Previously, it cost me around $550 to file tax returns as a sole proprietorship with my accountant. As a corporation it will cost about $2,500. To register and maintain an LLC or S-Corp costs a minimum of $800/year (to be able to actually put people on payroll and W2 them).
Not to mention that with the new Trump tax law, W2’d employees are no longer able to itemize their expenses like independent contractors are.
Since most musicians will have multiple (oftentimes 20+) “employers” in any given year – none of whom cover our expenses like equipment, rehearsal studios, recording studios, software, hardware, travel, lodging, food, etc. – we need the ability to write off these expenses. But if we are forced to be W2’d employees, we can’t do that anymore.
This is honestly just scratching the surface.
So there are actually quite a lot of added costs (and diminished benefits). What middle class musician can afford an additional $6,000 a year without it putting a serious strain on them? I honestly don’t know any.
Elmo shared the results of the Jammcard survey that was sent to their 4,000 California members (all vetted working music professionals):
Are you a member of the AFM (musicians union)?
64.8% – No I’m not
17.8% – Yes I am
13.2% – I used to be
2.4% – I am but I’d like not to be
1.7% – I don’t know what the AFM is
Do you make the majority of your income from union work or non union work?
97.6% – Non union
2.4% – Union
How do you prefer to be taxed as a music professional?
76.4% – 1099 (freelance/independent contractor)
15.6% – W2 (employee)
8% – I don’t know
Do you support California AB5 for music?
66.7% – I do not support it
8% – I support it
25.3% – I don’t know what it is
All in all, it worked out to be a very healthy discussion and she expressed willingness to create a ‘clean up bill’ and add clarification for the music community – essentially carving out certain music professionals from the law.
She explained that come January 6th when the Assembly is back in session, they can get to work on drafting language for the new Bill and once the language is agreed upon by all interested parties (us, RIAA, A2IM, AFM), they will vote on it. She did say that it will be voted on before September 1st (the deadline), but we shouldn’t expect it much sooner – these things take time.
But, and this is a huge Kardashian but, if this clean-up bill is passed, it will be retroactive. Meaning, even though nearly every musician in California will be in breach of this law come January 1st, this clean-up bill will essentially wipe away these, uh, crimes. So even though literally thousands of musicians will be breaking the law come January 1st, no one will be able to come after us once this clean-up bill is (hopefully) passed because it will in essence change the law from when it was enacted (January 1, 2020).
It was absolutely wonderful to meet with Assemblywoman Gonzalez with my fellow musicians and exercise our rights a bit. And I’m excited to continue to work with her to get this thing passed so musicians can continue to thrive in the state of California.
It seems like we’re moving in a positive direction, but we need to keep up the momentum to get us over the finish line. So! Please hit up your representatives and let them know that you’d like an exemption for music professionals.
You can find out who your representative is here.