The “ABC test” has had a massive impact on freelancers over the last few years. Originating in Maine in 1935, most of the current attention has been on its use in California (AB 5). It’s supposedly intended to address exploitation in the gig economy—with most public discussion focusing on rideshare companies.
People have asked me about my thoughts and I have one major critique—in its current form(s) its requirements focus on the worker. I’ve explained this on Twitter and written my local reps and Acting Secretary of Labor, Julie Su, about my perspective. The problem is that the test should be aimed at the employer level of the relationship.
The focus on the worker creates a few issues, including a lot of the back-and-forth required because of all the variation across different categories of independent workers in the United States. Instead of reigning in businesses that try to access the advantages of a dedicated and controlled workforce without offering stability in return, it messily attempts to create carve outs that inevitably cause more problems.
If an entity (I’m talking larger businesses…SMBs require more nuance) wants to benefit from the business environment in the U.S., it should contribute to the stability of that same environment through significant investment in employment. Anything less than that is a blatant and extractive attempt to benefit without contribution. This is especially offensive in this country., where so many essentials of life (accessible health insurance, auto loans, home buying and even renting) are tied to employment.
As freelancers though, especially with goals of building sustainable businesses that improve our lives, this discussion is more than just policy or politics.
Applying higher standards to and being more judgemental about the businesses we work with can actually enhance our freelance strategies and help us steer clear of exploitative relationships. This is because, as much as we’re independent from our client companies, their cultures and practices do still impact our lives as workers.
When vetting a company or industry, consider looking at the relationship for these three requirements:
1. It allows freelancers and contractors to dictate how work is performed
This can be difficult to tell from the outside, but you’d be surprised at how many businesses will flat out advertise “freelance” positions that have a set hourly rate, require 40 hour work weeks, and stipulate availability during specific hours. This isn’t freelancing. It’s “employment light” and the mark of a company trying to externalize risk onto the backs of workers by not providing the “benefits” that characterize the employment relationships.
This kind of company can be especially damaging in warping your expectations of how a freelance relationship should work, reinforcing negative patterns, and stealing valuable time from establishing better ones.
2. Its primary business function is provided by employees
Ask what a company’s primary output is more often.
SaaS companies produce software. Media companies publish. Car companies make cars. If they aren’t offering society the security of employment for contributing to their most critical function, consider looking elsewhere. I know this can get tricky in certain fields (like media and entertainment) but I do believe these fields have proven that they have deep issues with exploitation and under payment, so I encourage any lifestyle-focused freelancer to steer clear. (That said, if carve outs should be anywhere, they should protect workers in these fields from repercussions if these companies are pushed to do better.)
Using myself as an example, I’m a writer, but my clients are all tech companies. None of them resell my work…and if they dropped every freelancer, they could go on indefinitely (though not optimally).
3. It works with “vendors” over “freelancers”
Your freelance relationships shouldn’t involve a significant power difference. It’s why I encourage everyone to consider incorporation. You are a business in a relationship with another business—not a worker being given the “privilege” of being associated with a company.
Being treated as a vendor typically means they see you as providing a curated and dedicated service and are working with you because of your particular skill, expertise, and focus. This typically means you’ve done a good amount of work on the back end to establish the services you offer and market you work with—but that’s the point. If a company is looking for workers who are easily molded and manipulated, you probably want to keep some distance.
Of course, there’s a lot of nuance here, especially if you’re new to freelancing and still figuring out your freelance strategy, but it’s never too early to learn to be more discriminating in your freelance work. It’s a skill that only gets more valuable as you grow.
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