AB 522 Defends Independent Contractors by Repealing AB-5, Protects Small Businesses from Frivolous Lawsuits, and Imposes Transparency and Accountability on Labor Unions
Assemblyman Carl DeMaio is taking action to protect small businesses and independent contractors from the damaging effects of overreaching state policies with his new bill, AB 522, the “Freedom to Work Act.” This crucial reform seeks to undo the harm caused by California’s restrictive labor laws, particularly AB 5 (2019), which has severely limited businesses’ ability to hire independent contractors and the Private Attorney Generals Act (PAGA) that has resulted in costly predatory lawsuits.
AB 522 restores flexibility, offering Californians the opportunity to work on their terms without unnecessary regulatory barriers.
In addition, AB 522 addresses the flood of frivolous lawsuits under the PAGA, which have drained resources from small businesses and hindered their growth. By curbing these costly and unnecessary legal battles, the bill enables businesses to focus on creating jobs and expanding, rather than spending valuable resources on litigation. The bill also ensures greater transparency and accountability in labor unions, making sure their primary focus remains on workers’ rather than political agendas.
By reversing the negative impacts of AB 5 and PAGA lawsuits, AB 522 will restore fairness to California’s workforce and economy. The bill empowers small businesses, creates more job opportunities, and strengthens protections for independent contractors, all while ensuring labor unions are held accountable.
DeMaio provides the following statement explaining the importance of passing AB 522:
“California used to be the best state for someone to start their own small business and become part of the American Dream – but predatory laws like AB-5 and PAGA have dashed the dreams of our entrepreneurs by banning independent contracting and authorizing frivolous shake-down lawsuits against small businesses. My bill would make Californian a Freedom to Work state by allowing independent contractors to thrive and protecting small businesses from costly frivolous lawsuits. Finally, my bill requires full transparency on labor union use of member funds and holds them accountable for winning and maintaining true support from the workers they claim to represent.”
KEY PROVISIONS OF AB 522:
- Allows Use of Independent Contractors: Repeals AB 5 (2019) and allows for businesses to hire independent contractors without having to classify them as employees.
- Stops Frivolous Lawsuits: Repeals PAGA and puts an end to the frivolous and lucrative lawsuits that were crippling small businesses, while the money was going to the pockets of attorneys.
- Transparency for Unions: Employee organizations will be required to notify members of their membership costs every year, and will lose certification if the organization fails to represent 60% of eligible employees. Union members will be prohibited from performing union duties during work hours.