As industry practitioners are aware, California Assembly Bill 5 took effect on January 1, 2020. This bill seeks to respond to increasing trends toward gig economy work, in which workers are hired as independent contractors rather than employees in order for companies to avoid paying employment taxes and benefits. While legislators may not have intended to jeopardize the incomes of professional and highly trained translators and interpreters, under the language of bill, it seems that California translators and interpreters may need to incorporate in order to remain operational. According to the law, a sole proprietorship or LLC may no longer be enough for translators to practice in California.
Under AB5, for workers to be classified as independent contractors, they must pass an ABC test in which a) the worker has the freedom to determine the when, how, and where of the work, b) the work is outside of the bulk of the hiring entity's service offering, and c) the worker must be customarily engaged in the work provided. Translation and interpreting work does not meet the A and B criteria of this test. However, the test is not appropriate for the localization industry at all.
As practitioners will be aware, translation service companies customarily provide language services in a wide range of languages, yet often do not have enough work in a single language to justify a full-time hire. Similarly, translators and interpreters customarily provide services to a number of translation companies because they do not receive the volume of work from a single client that would allow them to make the income necessary to survive.
While the intention of the bill may have been to level the playing field for individual workers, for translators and interpreters AB5 has had the opposite effect. The bill places undue barrier to entry to the field for individual translators and interpreters who may now need to incorporate in order to practice in California. While how the law will be interpreted remains to be seen, in the meantime, many companies are electing to boycott highly qualified California translators and interpreters entirely, rather than risk an incorrect interpretation of the law. (See a recent tweet by the Coalition of Practicing Translators and Interpreters of California [CoPTIC] for example notices of this boycott.)
While organizations such as CoPTIC and the ATA continue to advocate for an exemption to this bill for professional translators and interpreters, California practitioners are at this time left in a major lurch. Afterwords Translations has incorporated in the state of Wyoming in order to not lose a business that has taken a great deal of effort to build. While CEO Alaina Brandt has elected to incorporate her company rather than lose her business due to the fumble of California legislators, she also reflects that the costs and reporting requirements of incorporation discourage new qualified talent in particular from entering the field. The bill may have set out to protect workers. In the end, because California legislators did not seek to truly understand the repercussions of this bill, they've instead given more leverage to big companies who may elect to reassign work previously completed by cultural experts in California to less culturally informed workers outside of the state and even outside of the country - which may have the effect of driving down rates.
In the end, California translators and interpreters won't be the only ones to suffer from this bill. End users in the state who rely on language experts in the realm of interpreting in particular are now at an even greater disadvantage in their ability to work with qualified, live human beings who truly understand their context.
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