Illustration © 2020 D.J. Billings

What You Can Do to Save Your Freelance Career from AB5

Does California hate freelancers? With the introduction of AB5, it sure seems that way. You may have strong opinions about the new law (I certainly do). The ideas presented in this law are also being adopted by other states and Federally with the PRO Act. Since it’s possible that you’ve been living in a cave or you’re coming off a twitter sabbatical and you haven’t heard about it, we should start with some history and facts.

What is AB5 and why should I care?

AB5 is a California law that went into effect on January 1st, 2020. It comes out of a landmark Supreme Court of California case, Dynamex Operations West, Inc. v. Superior Court. In that case, the court held that most workers are employees, ought to be classified as such, and the burden of proof for classifying individuals as independent contractors belongs to the hiring entity.*

The intention of the original bill, according to California Assemblywoman Lorena Gonzalez (who drafted the bill) was to prevent the misclassification of workers by employers who sought to avoid paying livable wages, healthcare and other benefits that they would normally pay to part or full time employees.

This applies to any independent contractor working in the state of California. Exemptions are given to “doctors, dentists, psychologists, insurance agents, stockbrokers, lawyers, accountants, engineers, and real estate agents, as they are seen to generally directly work with and set their prices to customers.”*

The exemption is also given to graphic designers for the same reasons.

Maybe you’re not a California resident and you’re thinking this doesn’t affect you. Those Left Coast weirdos, right? Think again. There are changes happening around the U.S. that will likely affect all independent contractors, so wherever you live, you should have a good understanding of what’s going on.

* https://en.wikipedia.org/wiki/California_Assembly_Bill_5_(2019)

Oy vey, the controversy! So what’s the problem?

If you’re guessing that there would be a ton of angst over this law, you’d be right. People who had been happily working as independent contractors for their entire careers are suddenly being told they must become W-2 employees for every client they work with.

Freelance journalists are getting particularly shafted by the law, as media organizations that hired them previously dropped their contracts in favor of hiring part and full-time writers.

https://www.ccn.com/vox-cheered-californias-gig-economy-law-then-fired-freelance-workers

There are more stories being told every day about people whose income depended on being an independent contractor and have had to suddenly change the way they work to conform to the law. Some claim to have even lost their entire source of income due to AB5. California Assemblyman Kevin Kiley has been tweeting these stories and you can read them here: https://twitter.com/KevinKileyCA

Since the responsibility of adhering to AB5 lies with the hiring entity, many companies have chosen to either only offer W-2 employment or simply not work with California freelancers.

Truck drivers who previously enjoyed being independent contractors and even own their own rigs have also been affected, as they are now supposed to be classified as employees.

Musicians are also scratching their heads and wondering if they suddenly need to become employees of every bar or venue they play.

Why is this a big deal? What can you do?

First, let me offer the disclaimer that I’m not a labor attorney and my take on this is purely from observation and my own understanding of the law. Take my advice at your own risk.

So what’s the big deal? Can’t we all just work as W-2 employees and get on with our lives? For some, that might be an acceptable answer. For others who seek to retain their independent status, or who have invested heavily in tools and equipment, this can be a huge financial setback. 

If you want to stay indie, and you’re not already a dentist, there are still things you can do that don’t require you to go W-2 with your clients.

ABC test

The law exempts those independent contractors who can pass a 3-part test:

  1. the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact
  2. the worker performs work that is outside the usual course of the hiring entity’s business
  3. the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity

If this sounds confusing, you’re not alone. Let’s break them down and apply them to real world situations:

A essentially means that you need to clearly be in charge of the work you do for your client. This doesn’t mean that as a graphic designer you can’t take direction in terms of what size they would like their flyer. It means that in the actual performance of the work they are not spelling out what days and hours you need to be working, where you need to be working, how you use your mouse, or what applications you use.

B is the one that’s problematic for journalists. If you’re writing a news article for a news organization that publishes news articles, you’re in the same business. If you make cakes for corporate retreats, you’re in a different business. If you create animation for a marketing firm’s presentation, you’re fine. If you create animation for an animation studio, you are supposed to be classified as an employee.

C is pretty cut and dry. If you’ve been doing virtual assistant work for years for multiple people and/or companies, then you can keep on keepin’ on as an indie contractor.

If you can pass that test, then you’re fine. But that’s just you. It’s crucially important that you’re able able to convey this to prospective clients who have concerns about whether or not they can hire you.

It’s crucially important that you’re able to convey this to prospective clients who have concerns about whether or not they can hire you.

When I grow up, I’ll become a real business!

One solution that Assemblywoman Gonzalez has been throwing out there is to simply become an LLC. I get what she’s saying. You need to treat your freelancing as a real business, and I agree. 

However, in California creating an LLC can be complicated and expensive to do correctly. You also open yourself up to a lot of tax issues, as well as an $800 minimum tax every year, whether you make any money or not. I’ve gone down this road myself and it’s not fun.

Some freelancers have had success meeting requirements of both the law and clients by simply filing a DBA and using a Federal Tax ID number rather than their Social Security number. In some situations, it can be that easy.

A Few Simple Things

I would advise this for any freelancer regardless of the law, but you can do some really simple things to make it easier to hire you.

  • Get business cards printed. I mean, come on. You should have these anyway.
  • Create a website. It doesn’t have to be fancy. A basic free WordPress or Wix site will do if you don’t want to go whole hog or actually conduct business online. But I have to ask, what century did you arrive from? And hey, was it really more polluted back then?
  • Get a separate checking account for your business. Employers aren’t going to care about this, but it’s one more way to show that you’re serious about running your business.

Opinions. I have them!

Of course I have strong opinions about this law, I’m a freelancer and I run multiple businesses in California. I believe that the burgeoning gig economy is going to take a huge step back.

I wasn’t happy to see this signed so quickly by Governor Newsom. It really should have been put to a vote by the people. I believe that any time we have government leaders deciding what’s best for us without input from their constituents, it means that there’s an agenda that has nothing to do with what the people actually want. And I believe that’s the case here. No one was asking for this bill, with the exception of the unions. While I believe that workers have the right to organize without interference from their employer, I also believe we have the right to remain independent.

Currently, the PRO Act bill is making its way through Congress, which is essentially the same as AB5, but on a national level. While on the surface the intent appears to protect workers, it’s actually doing harm to those who wish to remain independent.

Stepping off the soapbox…

The best thing that California freelancers can do to offset the effects of AB5 is to do everything in our power to conduct ourselves like a business.

Also, make your voice count. Contact your representative and get on social media and tell your story. Follow me on twitter, I want to hear from you!

If you need help or have questions, I’m here for you! Comment below or email me at dj@workathomegeek.com.

 

Photo by elizabeth lies on Unsplash

Today was kind of a weird day for me. It’s Monday, and usually coming off of a weekend (wait, what’s that?) I am all kinds of productive. For me, Mondays are my git-er-done days. I don’t really know why. I drink just as much coffee on those other days that don’t start with M.

But some days I’m just not feeling it and today is one of those days. I don’t know why, maybe my chakra is misaligned with the snow moon in my seventh house of cards. No real reason I can point to. But there it is.

I still got the work done. I had client work that I couldn’t just ignore, because there are other humans counting on me. Of course I had to do that work. But my moving-forward stuff, my hustling, my passive income-building activities are just kind of floating around my head like drunken bees singing, “I don’t wanna work, I just wanna bang on me drum all day…” I didn’t even want to write this post, but it’s on my calendar so if I don’t, I’ll probably have nightmares about notification badges pounding on my front door. Wouldn’t be the first time.

One of the things that people don’t realize about starting a freelance career is that it’s not all watching YouTube makeup tutorials in your underwear and sipping expensive teas from Mawlamyine. If you get kinda lazy on the 9-to-5, you can usually get by without anyone noticing – sometimes for a few days, even. But when you freelance, any time you spend being lazy is time lost bringing in new clients or marketing. Then you have to make it up later, and no, you don’t get overtime because it’s a national holiday, like Super Bowl Sunday or the Oscars. No soup for you!

So yeah, I’ll do the stuff. Maybe today won’t be one of those Shining Glorious Mondays where I accomplish ALL OF THE THINGS and still have time to invent a better method for stirring natural peanut butter. But at least I’ll know that I am moving forward, one step at a time. There will be another day where I can channel a carpenter ant on an endorphin high. Today is more… sloth on espresso.

Looking at you, Tuesday.

A Super Simple Method for Tracking Your Monthly Income

Do you know how much money you have coming in this month? I mean, from all sources. Your paycheck, your business, your side hustle, poker nights, all that yarn you have on eBay… whatever.

If you have one job or contract and you collect a regular paycheck, it doesn’t take much mental energy to get a sense for how much you’ll have to pay your bills and keep your cupboard stocked with chocolate and whiskey. When you work consistently, you typically get paid consistently and that’s super cool.

However, when you work on multiple projects, and you’re not working under any longterm contracts, your pay may not be so regular and it can be harder to know. Suddenly it’s the 28th and you have to check your account balance to figure out if you can pay to live another month. I hope that’s not the case and you have so much money coming in that it’s a no-brainer. Still, documenting your earnings and knowing what’s coming down the pipeline is a good practice.

I’ve been freelancing on many different projects for the past 12 years. Like all businesses, my income has had its share of highs and lows. For a long time I spent a good part of my weeks obsessively tracking my billable hours and worrying about when my next project would start. I never had a clear picture of what the next few months would bring. That was stressful and I wasted a lot of time worrying about stuff I could actually track.

Then I learned about tracking my monthly income using a pipeline spreadsheet. I’ve been using this method since 2014 and it’s made things much clearer for me.

As you’ll see, this thing is super simple. Each month is laid out in columns. In the first column under the months, you list your different sources of income, each with its own row. In the next columns within those rows, you enter the amount of income you expect to have come in that month.

An important distinction is that you’re not listing what you hope you’ll make, but what you actually have coming down the pipeline. As in, what you’ve already earned and is either in your checking account or on the way.

The last columns and rows calculate totals for you. At a glance, you can get a really good picture of what you’ll be paid in the very near future. As a bonus, when you look back over the year you can analyze your earnings. Because I’m a geek, I create charts of income for different categories through the years.

If you’re a spreadsheet wiz, you can make this yourself pretty easily. The formulas are simple sums. If you hate setting up stuff like this, I created one for you as a Microsoft Excel file. It’s a free download right here: Pipeline Spreadsheet

How it Works

I’ve added all kinds of fancy arrows and callouts in the image below, but I’ll also give you the rundown.

The top row is just the months of the year. Easy peasy.

The first column is where you will list your sources of income. You can see from my example that I list four. This is really up to you, you can split up different contracts or projects or just combine them all under “Freelance.”

In each monthly column, you simply list any income you know is coming for that category. I update this every time I have something new come in. Below that, I list each client and the amount I expect to receive from them. It’s not necessary but I find it helpful. Again, the amount you put in the income cell is only what you know is coming in that month. Not what you wish will come in or a lofty guess. This is for any money that’s going to hit your account for sure.

Note: I have a separate spreadsheet for all my passive income sources. I think I mentioned that I’m a geek.

On the far right in column N is the sum of your monthly income for each category. This calculates automatically because there’s a formula in that cell that tells it to. If you edit the cells in column N, they will cease to function and you’ll have to go old school and add them up yourself.

Similarly, Monthly Totals and Year Total update automagically, too. Isn’t that fun?

That’s really it. Super simple. As you do this throughout the year, I think you’ll find that you can better predict what’s coming and you’ll lose a little tension about it. Even if you see that June is looking a little weak, at least you’ll know that you need to do something about it. “Knowledge is power,” as the inventor of the spreadsheet famously said. Yes, I just made that up. But it feels true.

If you have any trouble with the download, the spreadsheet, or just frikkin’ making it rain every month, let me know. I’m here to help.

Photo by Shine Xiong on Unsplash

SHOOSH!

I grew up in a library. Okay, I didn’t actually grow up in one, like some weird, Dickensian mongrel child raised by librarians and hiding in the dumpsters at night. I just went in them a lot.

Yeah, I was that geek. As a kid I spent most of my time outside of school riding my bike to the library (on my own, which in 2020 is apparently a capital offense in several states) and burying myself in the stacks. There were also Saturday movie matinees (on a 16mm projector back then) and records to listen to. You could even check out puppets. No kidding. Puppets.

As parents and homeschoolers (double geek), Jenni and I fostered a love for the library in our kids. Any time we’ve moved to a new city, the first thing we do is go get library cards. Often before getting our new driver’s licenses, because the DMV sucks and books are forever.

The past year, our youngest was involved in two local youth productions. My job was to take him to rehearsals and make myself scarce (mostly at his request). Since rehearsals lasted about two hours in the late afternoon, I would haul my laptop and work stuff to the local library so I could at least get some work done while I hid my shameful adultness from the youths. Our local Los Angeles County library has decent WiFi, big tables, and outlets. It’s basically a 100% free co-working space. Sound cool? It kind of is cool. However, there are some trade-offs you make when you work out of a library. Not deal breakers, more like little compromises.

First come, first served

You have to grab a table fast. Most libraries have ample table space, but sometimes you’re competing with someone who brought their entire law library and schematic diagrams with them. Real estate is precious here. Kind of like outlets. Similar to a coffee shop, you have to snag your power fast.

No Coffee

Speaking of coffee, they don’t serve it. You have to bring your own. No, you can’t check out a Chemex. I’m not sure you can even get puppets anymore.

WiFi

It’s usually pretty decent if you’re not on BitTorrent or doing some crazy downloading. That’s sort of frowned upon anyway. You usually need a library card to log in, but that’s free. Sometimes it can take some fanoogling to get hooked in, and don’t count on the library staff to help you. They can give you the basic instructions, but they’re not your personal IT department.

Headphones. Headphones. Headphones.

I wrote that three times so neither of us will forget. The couple times I forgot, I seriously regretted it. Libraries have changed since the 1970s. No longer is there a sweet old librarian gently shooshing people when they get loud. They don’t do that anymore. So unless your ears are plugged and cranking The Sex Pistols, you’re going to hear every detail of how Clive’s Toastmasters meeting went.

The other thing that’s changed is that children are now encouraged to play freeze tag in the stacks. Somewhere, right now, thousands of sweet, dead librarians are spinning in their graves. I don’t blame the kids. They aren’t allowed to play outside their homes anymore without a government-approved guardian standing watch, so they have to get their yah-yahs out somewhere.

Headphones will save your life.

Oh yeah. Books

Did I mention that they have books? They do and they’re all free to borrow. You can’t do that at Starbucks or CoWorkNation. It’s pretty cool because sitting in the middle of a library with all those resources at your fingertips can inspire new ideas. It does for me. I can’t visit the library without browsing a few titles at random. You can borrow CDs and DVDs, too. Did I mention it’s free? It’s free.

Do yourself a favor and go get a library card. Take your laptop or Bullet Journal or giant schematic diagrams and give working at the library a try. They’re still an amazing resource and the more we use them the better chance they’ll stick around for a while.

Photo by Webaroo.com.au on Unsplash

How to stop the suckiness and make email work for you again

Why email sucks so bad

Email gets a bad rap. It’s almost as trendy to hate on email as it is Taylor Swift. For sure, there are a lot of things that really suck about email.

  • Too many file attachments
  • People use it to communicate frikkin’ everything, when an emoji text would do just fine
  • So, so many attachments
  • More spam than a Hawaiin luau
  • Useless group email chains
  • Ok, enough with the image signature attachments already, we know who you are by now.

So yeah, there’s a lot about email to hate. It wasn’t always like this, either. I remember setting up my first Prodigy email address (Probably after watching the Friends pilot and now you know how old I am), dying for someone, anyone, to send me a message. Skip ahead to today and I’m at Greta Garbo levels of leave me alone.

Is there anything good about email?

There are some new solutions to email that threaten to banish email to black and white TV status. Basecamp comes to mind, and it’s super useful for working groups. There are still some pros to using email that I believe are going to keep it around for a while longer.

  • It’s easy to use
  • There are tons of free email clients out there
  • You can store thousands of messages and refer to them later
  • File attachments! Okay, sometimes we need them
  • Just about everyone already has an email address

Since email isn’t going anywhere soon, we all have to figure out how to deal with the things that suck. I’ve spent over 20 years trying out different clients, platforms and systems for taking control of my email. I now have a tried-and-true system that has not only made me love email again, I’ve been able to corral this runaway hoss. You can have this feeling, too, and I’m going to show you exactly how to get it.

Think Different

So much of managing email well isn’t in the platform, it’s in your head. We think of email as this modern technology that’s different than anything else we’ve dealt with before. In reality, it’s just like that analog In/Out box you might keep on your desk. Papers come in that you have to deal with. Things go out that you’ve completed or are ready for someone else to handle for you. It really is that simple and I’m going to show you the direct correlation to your email. Plus, if you’re not so hot at handling that physical inbox on your desk, this system will help you with that, too.

Stop working out of your inbox

Like, right now. Stop. It’s called an inbox, not a things-pile-up-until-I-can’t-see-the-bottom box. Most of the time you can’t complete everything that lands in your inbox as soon it arrives. However, you can deal with it faster by getting it out of your way.

Rather than dealing with things, you’re going to redistribute them. If you have emotional avoidance issues, this should feel familiar. It requires some setup, but once you do that everything will start falling into place (literally) very quickly. To use an analog example, let’s say you get the electric bill in your inbox. Rather than stop everything you’re doing, open it up, peruse it, and possibly pay it, you’re going to get it out of your way, fast. As in immediately. 

Before you do that, you need to create a (super easy) 2-step system. First, you would have a folder labeled “Bills.” Clever, I know. Then, in your calendar, you would set a reminder for a day or time when you take care of bills.

Once you have that system in place, it’s easy. The bill comes into your inbox. You see the bill, but you’re in the middle of writing a blog post about forgetfulness and you need to stay focused. You take the bill, throw it into your “Bills” folder and poof! Your inbox is empty and you’re back to writing whatever it was you were writing about. Oh, right. Forgetfulness.

Think of it as a game, a challenge to keep your inbox clear at all times. It should be totally empty 90% of the time. It sounds like a Neil Gaiman fantasy, but it really can be that way, I promise.

Let’s take this into the electronic world and deal with your email.

My super secret never-fail email sorting method

If you’ve followed along so far, you can probably guess where we’re going with this. Yup. We’re going to set up some folders. And some flags. Maybe even some labels.

First, let’s talk about email clients and platforms. You might use Gmail, Apple Mail, Outlook or even Thunderbird. The beauty of my system is that it’s totally agnostic. It doesn’t matter what you’re using for email, the system is so simple you can do it anywhere. In fact, I’ve often switched platforms and besides a few minor details and tweaks, the basic system is the same.

The first thing you want to do (besides become hypnotized by the massive amount of emails in your inbox), is create places in your email client where you will redistribute the items in your inbox. Depending on what you’re using, this could mean creating folders (Outlook), mailboxes (Apple Mail), labels (Gmail), or tags (Thunderbird). Just like in the analog world, you might create folders like “Clients,” “Bills,” “Travel,” or “Expenses.” I even have folders set up for newsletters I’ll want to read later but don’t want hanging around my inbox.

Once you have those set up, it’s easy to drag those emails into the appropriate folders, or tag them with the right labels (like in Gmail). If your inbox is already inundated, this will take some time but once you’ve got that sorted out, new emails hitting your inbox will be a dream to sort.

It’s filtered, so it’s healthier

If you’re like me and you don’t want to spend your day sorting email every time the little bell dings (or that evil red button pops up), you can set up filters to handle it for you. In my newsletters folder example, I have a filter set up for different newsletter emails that come in. They automatically skip my inbox and go right into the appropriate place, keeping my inbox clear and happy.

The mantra you need to recite as you deal with email is “Sort it or delete it.”

Working out of your email

It’s the bane of the modern working world, but sometimes when you’re working, you have to have your email open. Many times I have to refer to client emails to get details about a project I’m working on. It can be distracting to be in my email sometimes. What I like to do is have a specific folder set up for that client and only have that one selected or open while I work. It eases a little bit of the inbox distraction.

Your smartphone is really dumb

One frustration that can pop up after you’ve created this system in your desktop is that your smartphone doesn’t want to play along (jerk). Either your folders and flags aren’t syncing or your phone app doesn’t manage email the same way. It’s like the difference between driving a car and riding a bike. Both have pedals but they work totally different. Also, it’s hard to drink a latte while riding a bike.

Digressions aside, the best advice is to steer clear of managing email on your phone. Yeah, I know it’s there. I know it’s convenient. I know you’re stuck in line at the post office for the third time this week. Try to avoid it if you can.

You may have to check email or even respond to email when you’re away from your desk. It’s a beautiful thing that we have the ability to do that and you should take advantage. What I advise you to avoid is trying to manage your new inbox-clearing system from your phone. It’s likely not going to be the same and you’ll probably end up as frustrated as before. So check and respond, but do your sorting when you’re back at your laptop.

Conquer your inbox, conquer the world

I’ve been there. I’ve seen my inbox pile up on a busy day, or come back from vacation with more emails than I can scroll through without having a wrist injury. I’ve also been to the other side, where my inbox is totally clear and I find myself with nothing to do but make myself a latte, put on my helmet and go for a ride.

We all deserve more sanity when it comes to email If this has been helpful for you, don’t be stingy. Share it with a friend. Send them an email.