February Virtual General Meeting – AB2257 and the PRO Act
GM presented by Lorena Ortiz Schneider and Shamus Sayed
Article by Carola F Berger
Two years after their NCTA General Meeting on AB5, Lorena Ortiz Schneider and Shamus Sayed teamed up again to update NCTA members and friends on the Californian labor law that superseded AB5, known by the unwieldy name AB2257, and on a new proposed federal law, the so-called PRO Act. The PRO Act contains the same ABC test (see below) as AB5.
The Infamous California Assembly Bill 5
Recall, AB5 made waves in the language sector and beyond due to its overly restrictive ABC test that classified a large number of hitherto independent contractors as employees, including translators, interpreters, and other language professionals. The goal of AB5 was to regulate businesses that use “gig workers” classified as independent contractors to avoid paying unemployment and other taxes. You can read all about AB5 and its consequences for the language sector in this recap of the NCTA February 2020 General Meeting.
However, as lawmakers realized, AB5’s sweeping new classification by means of the ABC test was not always correct when it came to knowledge professionals such as language pros, and so they amended AB5 with Assembly Bill 2257. AB2257 was signed into law by Governor Newsom in September 2020 and is retroactive to January 2020, effectively superseding AB5 completely.
Navigating Assembly Bill 2257
While AB2257 contains a straightforward exemption for translators under the category “professional services,” the exemption for interpreters is not quite so straightforward, as our speakers explained.
There is an exemption for interpreters under the category “referral agency relationship.” In this category, interpreters were grouped with sports coaches, graphic designers, dog walkers, and other assorted professions. To qualify for this referral agency exemption, interpreters must also be certified or registered, where available in the given language combination, with a listed authority such as the Judicial Council of California, the Registry of Interpreters for the Deaf, or the National Board of Certification for Medical Interpreters. Where there is no such certification available in a specific language combination, the referral agency exemption applies without.
What Does This Mean in Practice?
- Treat your freelancing like a business – a sole proprietorship suffices, you do not need to form a more complicated business entity such as an LLC or a corporation. As a sole proprietor, you should
- Protect your social security number (SSN) by getting a free federal Employee Identification Number (EIN) from the IRS. This can be done in less than 5 minutes online, and despite the name, you do not need to employ anyone other than yourself: https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers. As an aside, using an EIN instead of your SSN also protects you from scams (see, for example this free ATA webinar by the author for more details). Use this EIN on all your W-9s.
- Apply for a business license if the jurisdiction where you provide services requires it. In my (Carola Berger’s) case, I currently only need a home office permit that I applied for once upon moving to my current city, whereas in my previous location I needed to renew my business license every year.
- Know that a fictitious business name (FBN), also known as a DBA (doing business as) is entirely optional, as are more complicated business structures. You can read about the present author’s experiences with forming an LLC in California in the Spring 2020 print edition of Translorial, Vol. 42, No. 1, p. 14, available for download in the Translorial Archive on the NCTA website (members only).
- Maintain your CV and continuing education credentials.
- Interpreters must be certified if a certification is applicable, available, and appropriate.
- Applicable and appropriate: There are certifications for medical and judicial interpreters, but there are none in educational, conference, business, and religious settings, so in these settings, certification is not applicable. A medical interpreting certification, for instance, will not be appropriate for religious settings.
- Available: Certification is available for languages such as Arabic, Cantonese, Korean, Mandarin, Russian, Spanish, and Vietnamese, among others.
- Advertise your services – options are:
- ATA and NCTA Profiles (Your NCTA profile is included in your membership fee – why not use it?!)
- LinkedIn, Twitter, and other social media
- Business cards
- Advertise your certification (if you have one)!
In case one of the language service agencies you are doing business with is audited, the above documentation is required. While the burden is on the agency to supply this documentation in case of an audit, as a truly independent contractor you would do your agency business partners and yourself a big favor if you were able to supply all the required documentation as listed above at the beginning of your business relationship and keep that documentation up to date.
A New Bill on the Federal Block – the PRO Act
To complicate matters further, there is now a federal bill, Protecting the Right to Organize Act (HR 842), also known as the PRO Act. The bill passed the US House of Representatives and is currently being discussed in the Senate. At first glance, this bill is much less sweeping than California’s AB5, but you should still pay attention, because it contains the exact same ABC test as AB5, without ANY exemptions. The bill, on the face of it, pertains only to the right to organize and does not contain any other provisions. However, at best it could create confusion about which criteria to apply to classify employees or independent contractors, at worst the PRO Act could set a very dangerous precedent. In this case, the situation that we experienced at the beginning of 2020 could repeat itself and endanger the livelihoods of truly independent language professionals.
Furthermore, ABC tests and similar regulations are creeping in in other situations, such as the Unemployment Insurance Modernization Act and the Climate Resilience Workforce Act. While the noble goal of the ABC test and similar language is to regulate the bad apples that misclassify employees as independent contractors to avoid paying various applicable taxes, the result is often a sweeping misclassification in the opposite direction.
A lively discussion followed Lorena and Shamus’s presentation, underscoring the importance of this topic for language professionals. As Lorena and Shamus emphasized, language professionals need to be vigilant and PROactive to avoid a repeat of California’s AB5 chaos. Lorena, founder of CoPTIC America, invited us to visit the CoPTIC America website and act now to advocate for our profession. Donations to CoPTIC America are also greatly appreciated. While not tax deductible, all donations go 100% towards advocacy efforts. (Full disclosure: The present author is part of CoPTIC America’s Steering Committee, and said Steering Committee is 100% comprised of volunteers.)