How California’s New Employee Law May Affect Cam Performers, Cam Studios and Cam Platforms

Many of you have probably heard about California Assembly Bill 5, now signed into law by CaliforniAB5a Governor Gavin Newsome. While this law was meant to deal with gig type employees such as Uber and Lyft drivers, it may also have negative effects on cam sites and cam performers.

The preamble to the legislation reads “The bill would provide that for purposes of the provisions of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business. The bill would exempt specified occupations from the application of Dynamex and would instead provide that these occupations are governed by Borello. These exempt occupations would include, among others, licensed insurance agents, certain licensed health care professionals, registered securities broker-dealers or investment advisers, direct sales salespersons, real estate licensees, commercial fishermen, workers providing licensed barber or cosmetology services, and others performing work under a contract for professional services, with another business entity, or pursuant to a subcontract in the construction industry.”

When employers are allowed to classify potential employees as independent contractors, state and local governments lose tax revenue. There has always been a presumption in California that anyone paid by a company is in fact an employee of that company. Now California has codified this idea and made it a statute. However, one that is not easy to understand though.

Obviously, cam performer is not listed as an exempt occupation listed above – which means that it is included in the list of occupations that are now covered by Assembly Bill 5. It should be noted that an actor or actress performing for an adult studio or director under the direction of that studio would most certainly be considered an employee under this new law. As for cam performers, it is a bit more confusing.

The entire text of the law can be found here…

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB5

An article discussing the law from the Los Angeles Times can be found here…

https://www.latimes.com/california/story/2019-09-18/gavin-newsom-signs-ab5-employees0independent-contractors-california

Here is the important language of AB5 that will affect cam performers;

…a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed…

In order to be considered an independent contract as a cam performer – all three of those tests must be met and satisfied. It is not enough that 2 out of the 3 are satisfied. The text explicitly states “ALL.”

For the most part, a cam performer cannot meet the legal requirements for (B) and (C). It is more than likely that they will satisfy (A) though. Unfortunately, satisfying just one of the prongs of the 3-part test is not enough.

Cam performers would most likely be considered employees under Assembly Bill 5 if this issue is ever litigated in a California court.

So what does this all mean?

Cam sites may have to treat those performers that are located in California as actual employees, no different than Uber and Lyft now have to reclassify their California drivers. Which would require them to collect information about the cam performer’s immigration status, Social Security number as well as withhold payroll taxes from each payment issued to a performer. Cam sites may also be required to pay state minimum wages to performers if a performer does not earn enough in tips. Cam performers may also have to be given mandatory breaks depending on how many hours they decide to perform on camera for. Also, cam sites would need to keep track of the time spent on-cam versus time spent off cam for each California based performer.

Failure to do all of that could result in a class action litigation being instituted against the various cam sites by employment law plaintiff attorneys. This is exactly what happened to numerous gentlemen’s clubs in California and Nevada.

See the following articles…

https://topclassactions.com/lawsuit-settlements/closed-settlements/890442-seventh-veil-royal-palace-dancer-wages-class-action-settlement/

https://www.lamag.com/citythinkblog/soldiers-of-pole-stripper-union/

https://www.latimes.com/local/lanow/la-me-ln-6.5-million-award-exotic-dancers-tips-20150423-story.html

Millions of dollars in settlements have been paid to dancers by various gentlemen clubs in California. Those dancers are now required to be treated as employees not independent contractors. If adult entertainment dancers are considered employees in California, it is likely that cam performers would be considered employees as well.

I am sure cam sites and cam studios located or that do business in California may be changing how they treat their California based performers or risk potential lawsuits filed by disgruntled cam performers.

Assembly Bill 5 may completely change the cam industry in California forever. The potential is there for other states to adopt similar legislation in the future.

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