In the USA, AB-5 or Dynamex is shaking the translation industry and it has become a well-known term for most of the companies doing business with the US. It is currently for California only but to outline the truth, it is a trend and might be adopted elsewhere, too. We’ve decided to address the topic too so you may ask yourselves: What would you do if this happened in your country or state?
How this can affect your business?
Being in an industry that deals with freelancers all the time, and with freelancing being such an attractive option for many in today’s digital world, we can’t help but ask ourselves a few questions. The first one being: “Where is the free will for both LSPs and Freelancers in this one?”
The two sides of the same coin
From a professional’s point of view, there are pros and cons to both supporting and denouncing Bill AB-5.
On one hand, we have the freelance translators who chose to be freelancers due to the status granting flexibility in their schedule, freedom to choose their own projects, and ability to work independently from the rigorous control that comes with most jobs.
On the other hand, there are freelancers who would prefer to have the additional security that a permanent contract and a normal workplace provides.
Next question: What about LSPs?
As far as LSPs are concerned, the complications start with some of the legal terms and their definitions. First, we need to examine the meaning of what’s considered an “independent contractor”, the ABC test, and how it affects us as LSPs.
In order to be considered an independent contractor (instead of an employee), all 3 requirements in the ABC test must be met.
The essence of the conflict is that LSPs hire freelancers to work as additional resources for work that our in-house teams can’t fully cover, in exactly the same field we operate in. The ABC test rules that option out by defining any workers who perform the same tasks as the company as employees, rather than independent contractors leading to considerable complications for the industry as a whole.
The challenges that follow
All of the above is to further your understanding when we list the problems that stand before us, and why we need to find a solution for these important issues. As LSPs, our Top 5 problems to tackle are:
- Increased prices: Increase in expenses unavoidably leads to an increase in the total price of the product.
- Lack of resources: Because it had to be compliant with the law, one online magazine had to release all its freelancers, and the same can happen with LSPs that work with California-based freelancers.
- A significant and rapid decrease in number of clients who are willing to work with California-based companies
- Increased unemployment: As number of clients willing to work with Californian companies decrease, it will lead to less jobs available to both companies and individuals. In addition, many companies within the state will choose to redistribute the jobs they have been sending to Californian freelancers to workers outside of the state or even outside of the country.
The 1-StopAsia solution
Our company has put in a lot of hours and effort into studying the bill and its effects, considering the situation from all angles. Here is what we’ve done so far:
- All of the translators that work through our LA office are already registered as our employees.
- When we do have to outsource work, we’ve taken special care to do it in a way that’s legal according to the law.
- All of our Asian offices have our translators registered as employees as well.
At 1-StopAsia, we want to make it easier for you, so we’re working on an exclusive guide for our clients and partners. An AB-5 Ebook will be soon published, so if you want to know more on the matter, please contact our team at marketing@1stopasia.com and we will provide you with a free download option once it is ready.