Clarifying AB5: Meaning and Impact for Independent Translators and Interpreters in the US*

 

In September 2019, the California State Senate voted to pass California Assembly Bill 5, or AB5. This law requires that people working in California for a company primarily engaged in the type of work that someone working for them is doing (which would include translators working for translation agencies, though not translators working for a company primarily engaged in something else) be considered as employees rather than independent contractors. Employees under California law are entitled to various benefits, such as health insurance, disability, and sick pay.

AB5 exempts several professions from this test: doctors, insurance agents, lawyers, hairdressers, engineers, to name a few. However, translators and interpreters (T&I) have not been included in this exemption.

In view of this ticklish situation, which is impacting California independent translators and interpreters, and considering its potential repercussions in other states and throughout the United States, Intercambios, the newsletter of the Spanish Language Division (SPD) of the American Translators Association (ATA), would like to provide its community of more than 4,000 translators and interpreters accurate, clear and useful information through different viewpoints about this significant bill.

To this end, Intercambios has invited three important members of the T&I community in the United States: Esther Hermida, Federal and CA Court Certified, Michael Ferreira, President of the California Federation of Interpreters Local 39000, and Tony Rosado, U.S. State Department Conference-level interpreter & Federal, CO and NM Court Certified, to share their stances with the readers.

*Note: Opinions expressed in this interview are solely those of the interviewees.

While ATA respects the individual opinions of its members, ATA strongly supports amending AB5 to include a specific exemption for translators and interpreters. To learn more, click here.

Q1: Since AB5 was enacted, many people in California have shown their support or opposition. Do you think AB5 is beneficial or detrimental to California translators and interpreters? Why?

Esther Hermida: AB5 is detrimental to the profession as a whole. We are coming in with the presumption that language service companies will comply with the law and offer jobs, even if it means being an employee for merely a three-hour “gig”. We are currently seeing the opposite. We are being cut-off from the rest of the country; we are radioactive when it comes to agencies. They can still use the services of other professionals who can travel, say, to Los Angeles, to cover an event. The cost will be paid by the end client. Large companies can reinvent themselves and try ways to avoid compliance, particularly if they are located outside California and we can’t stop it. Case in point, I have personally received a cancellation for a conference scheduled in for early 2020.

I am registered as a S-corporation and my course of business is identified as a translation company. Much has been said about the B2B section of AB5, yet I still cannot work for other LSCs as the B test of AB5 still applies to me as an interpreter. Test B, to determine if I’m an employee or a contractor states: “The individual performs work that is outside the usual course of the hiring entity’s business”. Lorena S. Gonzalez directly replied to one of my Tweets saying, “The B test will not be removed. It’s core to the Court’s ruling to clarify who is an employee”. But guess what, court reporting firms can still function as agencies and contract with interpreters without running afoul of the B prong of the law.

Professional interpreters working as employees in the private sector will be limited and will be subordinates instead of negotiating as equal contracting parties. They cannot give themselves raises. They will not get paid a cancellation. There will be no 24-hour cancellation notice necessary. The employer can change working conditions arbitrarily.

Our write-offs will disappear if we are getting paid for a job as an employee. We will no longer be able to write off our car expenses, gas, parking fees, mileage, etc. under Schedule C. The “A-B-C test” will be used to determine the appropriate classification for the purpose of the Labor Code, the Employment Development Department, and Department of Industrial Relations – Div. of Labor Standards and Workers Compensation. Getting employment benefits will be limited to Workers Compensation Insurance, State Disability Insurance (we can contribute ourselves), and income tax deductions.

I work for about 11 different agencies. Not a single one will offer free health insurance as they are only mandated to offer this to employees who work over 28 hours a week; and if they have more than 50 employees. Most of our LSCs are small businesses and don’t meet the threshold. I cannot claim unemployment benefits because if one company “fires” me, I’ll have to prove that I’ve been unemployed for two weeks before I can submit a claim. If it was granted, the benefits are capped to a maximum of $450 a week; which is no real benefit to us as professionals. Also, I will continue working for the other 10 LSCs. If, as a translator, I suffer from Carpal Tunnel Syndrome, I’ll have to sue each of my employers to determine who is liable and for what percentage.

AB5 was written to protect misclassified workers. Assembly Bill 5 is allegedly intended to codify the California Supreme Court’s Dynamex decision. It is meant to protect truck drivers who worked exclusively for Dynamex and punish large corporations like Uber and Lyft. I personally interpreted during some of the depositions of these truck drivers, so I am extremely familiar with their position. I am in favor of protecting misclassified workers but not at the expense of giving up my freedom and my choices.

Historically, the best way to serve our community is by contracting with highly skilled interpreters who are part of a limited roster or pool of interpreters available to the public and LSCs. Interpreters do not need protection. There is recourse to protect those who feel exploited by LSCs and those who have been truly misclassified.

If anyone needs employment, they can apply with the local courthouse. With the full implementation of the Language Access Plan in California there will be more opportunities for employment in the public sector, even if you are not court certified. There will be many ways in which bilinguals can serve the public as employees.

Colleagues that argue in favor of AB5 come from the mindset that agencies abuse interpreters. My experience is far from that as I consider myself a businessperson. I negotiate my fees and my income is six figures. Agencies save me the hassle of billing the direct client; I don’t have to wait up to six months to get paid. They market their services and win contracts that I will never be able to bid for on my own, as even the state of California has many requirements to bid on jobs and a sole practitioner will not be able to meet their criteria. I have provided services to all my clients equally, including LSCs, for 26 years.

Michael Ferreira: In truth, I think that the only group that would find AB5 to be detrimental would be the large language service companies, the very same who are spearheading the drive toward obtaining a carve out for themselves, while convincing the interpreters whom they hire that it is in their best interest as well. Recently one of our new units in the local Interpreters Guild of America held an information workshop for independent interpreters; invited to present was an EDD representative. Information presented indicated that the focus of the bill was not on the individual interpreter, but on the company/entity that obtains the end clients and then contracts the interpreter/translator to carry out the service.

Tony Rosado: First, I would like to clarify one thing: AB5 does not hurt interpreters as professionals; it impacts the agencies who use interpreters to profit from a service that should be provided directly to the client. There is nothing in the law that keeps interpreters from working as independent contractors. It just sets rules protecting interpreters from agencies’ one-sided practices. In our quest for recognition as a true profession, freelance interpreters should work with direct clients just like attorneys or physicians. Working through an agency takes our service from a professional setting into a commercial, merchant-like scenario. Unfortunately, because that is the way it has been for a long time, most interpreters have been “taught” that being independent means working for agencies. They don’t see how this idea of “independence” leaves them working for someone who dictates the rules and decides when they work. That looks like employment, just for several employers instead of one, and with no benefits or protections. AB5 is not a perfect piece of legislation, but it will make interpreters look for more direct clients, will end big agencies’ freeride, and will eliminate small agencies who want to get the benefits of being a corporation assuming none of the legal, ethical, and moral responsibilities employers must meet, makes it more beneficial than detrimental. The same opinion applies to translators.


Q2: Given the nature of freelance jobs, what do you think the benefits would be for translators as employees rather than independent contractors? 

Esther Hermida: If that is what the interpreter or translator wants, then I’m assuming they want steady work and guaranteed work. That person wanted to be a full-time employee to begin with. However, I don’t see too many interpreters and translators advocating for employment. Being an employee means giving up not only flexibility but variety. Those of us who freelance enjoy being able to mix genres, settings, and subject matters—which rarely comes with full-time employment.

There’s also the misconception that you’ll be offered a part-time or full-time position. I have seen agency contracts that state that the interpreter will be able to accept or refuse work, as usual. All pertinent deductions will come out of the paycheck and interpreter will receive a W-2 instead of a 1099. This is the more likely scenario. The interpreter or translator will still need to work for several language service providers yet will not enjoy any of the benefits of self-employment.

Michael Ferreira: Since this is more of a questionnaire, rather than an interview, I’m uncertain what is meant here by “the nature of freelance jobs,” but after being in this profession for almost 30 years, I can only express what I believe to be the nature of freelance jobs from my participation in the freelance market for many years before becoming an employee, and from my observations as to how that market and its intricacies have developed over the course of my own career.

In general, being an employee has certain benefits in labor law, such as the ability to collectively bargain, representational rights, no dismissal without cause, seniority in assignments, etc. I remember the arbitrary nature of working in the California Superior Courts with respect to being dismissed, and favoritism over seniority, etc. This has changed with our contracts, and for the better. Management has rights, but interpreter employees have enforceable rights as well.

Tony Rosado: There is nothing in the law keeping interpreters and translators from remaining as independent contractors if they wish to do so. The changes are directed to the agencies. If an interpreter or translator wants to freelance, they can do it by directly providing their services to their clients. Those who spend most of their professional time working for the same two or three agencies just as the A-B-C test describes, would continue to do the same, but they would enjoy labor rights and protections. Benefits would include health insurance, worker’s compensation insurance, sick leave, retirement, maternity leave, paid holidays and vacation, employer contribution to their Social Security fund, and others. It would also give them the right to seek labor union membership if they wish to do so. Our colleagues who think they can only work through an agency are wrong. They need to talk to the beneficiary of their services: businesses, hospitals, law offices, and explain they will deal with interpreters and translators directly from now on. I cannot accept some colleagues would abandon their peers needing protection just to avoid the inconvenience of adopting the direct-client model.


“Balance Justice Law”. [Image by CQF-avocat from Pixabay, February 5, 2020]

Q3: AB5 will affect people who were previously self-employed, such as drivers, musicians, photographers, and designers. In many cases, these people will become employees of other companies. Should this also be the case for freelance interpreters and translators? Should they have an exemption?  

Esther Hermida: I am part of the steering committee of CoPTIC and we are actively seeking an exemption for our profession. Those same professions mentioned in your question are being let go; they are not getting job offers. I honestly have not heard of companies offering jobs in our sector nor in any other.  Maybe in the future, but this has taken all of us quite by surprise and without a grace period to adjust.

Michael Ferreira: It should be the case for “freelance” interpreters and translators if their situation conforms to the A-B-C test of Dynamex. However, there is one “exemption” that could be of service to all interpreters/translators wishing to maintain their self-employed status: the business-to-business exemption.

But first, a brief history of how the language services industry developed to what is the situation today. I’m mostly speaking about California; nonetheless, it could be applied around the world. The reality of how our industry works is in large part through intermediaries, whether that be large language service provider companies like Berlitz, The Word, Interpret America, SOSi, or smaller mid-size to mom-n-pop operations.

In an actual independent, entrepreneurial relationship, the provider of the service renders the interpreting/translation directly to the end user, the original client needing the service. What has developed over the years is that the interpreter/translator “entrepreneurs” are hired to render services to clients that the language service provider companies sourced for the company’s profit. They are essentially working “gigs,” providing the translation/interpreting service to the companies whose main enterprise is providing translation/interpreting services to the public.

So, if an interpreter/translator has a business license, or DBA, or even if he/she/they want to do a full incorporation, and they provide language services to entities who in turn do not have as their principal business providing language services, then the interpreter/translator is “exempt” under the business-to-business clause. It will change the industry as the “self-employed” interpreters/translators will have to source and market directly to clients; clients who do not take the service product and present it to the end user as their own. I know. . . the free market is a tough row to hoe!

Tony Rosado: No. AB5 is far from perfect, but an exemption will put agencies back on the driver’s seat and will leave many interpreters and translators defenseless. There are many interpreters and translators who let agencies take advantage of them and rake the profits of the work they provide not because they like it, but because they have no choice. Many colleagues cannot look for direct clients because of personal circumstances—a sick child, an elderly parent, or a physical disability makes it impossible for them to travel or look for a better option. They work for these agencies because they have no choice. These interpreters and translators deserve legal protection from abusive de-facto employers. Agencies and their supporters argue that non-professional occupations have been exempted from the law. That is because they are not professional occupations, and unless they were exempted, those individuals would lose their jobs. That is not the case of interpreters and translators, they can work as freelancers if they do it for direct clients. Even those who, for some reason, wanted to continue working for agencies without being employees can do so by incorporating. It takes less than ten minutes to do so in California. If the law is amended, it must keep interpreters and translators in the driver’s seat; it cannot give agencies their privileges back. Agencies might hire interpreters and translators as independent contractors for a very limited number of events a year, but even in those situations, agencies should carry health, worker’s compensation coverage for these freelancers and they should contribute to their retirement fund according to the services provided. Agencies should be penalized if they fail to do so and when they refuse to retain a freelancer who demands such benefits.


Q4: There are voices for and against regarding the potential advantages/disadvantages of AB5. How do you think California’s AB5 will affect other states in this regard?

Esther Hermida: We are seeing all professions affected by AB5. They are coming out in droves against forced employment. And that’s what it is: forced employment. We have no say on the matter. The Democratic presidential candidates have already expressed approval of the law. It will generate more taxes for the state coffers. Since employees get taxed on gross income and not net income, as self-employed interpreters and translators, we can currently deduct all of our expenses before we actually pay taxes, which do include self-employment taxes. Make no mistake about it, we do pay our fair share of taxes even without AB5.

Other blue states are jumping in on the bandwagon seeing the success of AB5 passing legislature. This will definitely affect every interpreter and translator in other states sooner or later.

Michael Ferreira: I don’t know how it will affect other states; I suppose more liberal states will adopt similar guidelines; don’t hold your breath in Alabama. I do know that many have complained that out of state [California] language service provider companies (especially the big ones), have alerted that they will no longer be using the services of California-based interpreters/translators. This will require California-based interpreters/translators to invest more time and money into marketing, business outreach, networking with other independents, instead of waiting for language service companies to offer source clients and search out freelance interpreters to offer gigs.

Tony Rosado: AB5 will have a positive impact elsewhere. It is a fact that many states will follow, and possibly their legislation will improve where AB5 came short. That other states are considering the bill tells us that legislators around the country have noticed many entities and individuals are taking advantage of current legislation and they have decided to fix it. I just hope that interpreters and translators in other states understand this legislation is not against them but against those agencies who take advantage of them. I hope interpreters and translators in other states considering similar legislation spend their time explaining to their clients that the professional service will remain the same, that they just need to adjust their practices to retain them directly bypassing the agencies, and that they will save money by eliminating the intermediary. This would be time better spent than defending the agency model like they did in California.


Q5: There are a plethora of resources such as news articles, blog posts, and groups about AB5, with a variety of perspectives. If translators and interpreters are interested in following up on the decisions and revisions of the bill, where could they find objective and reliable information?

Esther Hermida:

    1. Consult with your CPA and/or labor attorney as to the best course for you.
    2. Don’t do something because everyone else is doing it.
    3. Make it a point of making educated decisions by reading the Dynamex decision and AB5 directly. Every person that has done so arrives at the same conclusion: The only way out is getting an exemption or to have the law deemed unconstitutional by way of a lawsuit (happening on behalf of journalists now).
    4. Follow other professions on Twitter, Facebook, and LinkedIn. We are not the only ones impacted by AB5; it makes you feel less isolated.
    5. Follow and support CoPTIC as all the major professional associations are supporting us. CoalitionPTIC.org. We have a proven strategy of constituency-driven advocacy.

There is a lot of speculation as to what will happen next year with the legislature. This isn’t just another bill. This is a law that will affect millions of freelancers in the state. Freelancers that have not been a burden to the state. I am hopeful that our constituent-driven efforts will reap results. I can say with a clear conscience that I gave it my all.

Michael Ferreira: I know that one of our units made up of freelancers, Interpreters Guild of America, is offering, and has offered, seminars with lawyers and presentations by representatives of the Employment Development Department of California. I would say that the best source would be California governmental agencies, such as EDD, and California Department of Labor, etc.

It should be noted that there are already lawsuits filed, appeals from which could take months, or even years, as well as confusion among many state government enforcement mechanisms about how this AB5 is exactly going to work. The focus is on the company, not the individual; therefore, it is highly unlikely that if a couple interpreters agree to take on some work overload with a direct client that there would be any danger of being forced to become an employee.

It will take time to really see how this AB5 will play out, and what will be needed to “fix” it, or what should be amended, or if the whole thing is declared unconstitutional and should go back to the drawing board. It’s unclear what the mechanism is for someone asking to become an employee. . . probably the same as under the Borello: One makes a wage or misclassification claim with the California Department of Industrial Relations.

The reality is that we are almost a month into this, and there has been no company that I know of that has been forced to hire on anyone as an employee; I’m not saying that won’t change, but one would have thought something would have happened by now.

Tony Rosado: First they need to read the legislation and understand it. Do not let special interest groups explain it to you. I think they should read what I have written so far. There are many blog posts, articles, and videos, but most are one-sided. I suggest you see behind the information: if labor unions, big agencies, small agencies fighting to survive, or interpreters and translators with a vested interest in an agency or union are behind it, take it for what it is: a sales pitch. If professional associations are behind the information, see if the association has corporate members, and if so, remember they may not be objective. I do not live in California, I do not belong to any labor union, and I work with direct clients, so when I give my opinion and interpretation of the law, I have nothing to gain.

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Thank you so much for granting this interview. Your participation will contribute to a better understanding of AB5 and its potential repercussions for the community of independent translators and interpreters in California and, possibly, in the United States.

[Proofreader of this article: Paul Merriam, Intercambios reviewer and Editorial Committee member]