Letter Requesting an Exemption to California Assembly Bill 5 for Meeting and Event Planners

The following letter was written by Sheryl Schane to Assemblyman Brian Maienschein regarding AB 5

Dear Assembly Member Maienschein,

My name is Sheryl Schane. I work as a Meeting and Event Planner living in your district. I am writing to tell you how AB 5 is already affecting myself and other meeting and event planners, and to get your help in amending and or repealing AB 5. I am a 25-year meeting and conference planner. AB 5 is creating lots of confusion in the language of this bill and the unintended consequences of the domino effects of loss of work and contracts.

I understand there are many unclassified employees in the State of California, but we are not those people. We belong to a large Billion Dollar Hospitality and Tourism Industry in California. We are qualified and certified professionals who are in control of our work and fees. We must and need to remain independent to continue to do corporate and trade association meeting planning logistics. We choose to be independent. We choose to claim exemptions and many business expenses for the vast amount of travel we must do to several hotels, convention facilities and other onsite business locations. And, the continuing education that we do to keep our industry certifications.

Would you risk losing big money business and revenue from major conventions like Comic-Con, NAMM, DreamForce, the BNP Paribas Professional Women’s WTA and Men’s WTP Tennis Tournament, along with hundreds of Medical Conferences and Meetings coming from this industry? It’s already happening. The domino effect of unintended consequences of AB 5. My industry colleagues are receiving notices from agencies no longer contracting with CA independent meeting planners and independent onsite meeting managers because of AB 5. Instead, these agencies and companies are choosing to use our colleagues from neighboring states to employ to do our jobs here in California. These agencies and companies I contract with, are seriously considering no longer holding future meetings based at CA hotels and CA convention facilities. They are starting to book future meetings and take their very handsome spending budgets along with them to Las Vegas, Nevada, Scottsdale, Arizona, Dallas, Texas, and high-profile cities in Florida.

The fact that this legislation did not even consider how many millions of dollars are spent by companies, trade associations and non-profits traveling to California to hold small to large scale corporate meetings or conferences/conventions was not thought out. Do you want to lose Comic-Con? What about the ballot measure the City of San Diego is trying to pass to expand the convention center? If this law is not repealed or amended, Big Business will continue to boycott California. It has already begun because of AB 5. Meeting Planners are the ones that make these high-profile meetings happen. We are professionals in our field, not the hourly minimum wage workers this bill targets at Uber and Lyft. Let me give you a view into my world.

What We Do for Clients and Agencies:

We not only manage the logistics for high profile meetings and conferences/conventions, we are often contracted by the client to subcontract and hire live entertainment, celebs, sports personalities, Emcees, local musicians, professional speakers, catering, car services, tarot, magicians, caricature artists, various dancers, comedians, authors, AV and Engineering Techs, Photographers, Interpreters for international conference delegates, Videographers, various rental companies for tables, linens, chairs, plants. The list of vendors is so vast of the contractors that I would be forced to employ (many one-off hires) or my client would.

I work with clients as well as several agencies a year. I have my LLC and EIN number and I am registered with the State of California. AB5 unfairly penalizes me as I see it, because of the “ABC” component of the test under AB 5. Why? And, why would I want to continue to pay to have or keep a business then in California? I already pay over $800 a year in taxes/fees to the Franchise Tax Board for my LLC. And, I pay the Secretary of State $20 for my articles of Information updates. I also pay and maintain a business checking account that costs me to maintain each year. And, now Lorena Gonzalez the author of AB 5 wants me to be an employee because she thinks I maybe misclassified? AB 5 is over-reaching in dictating and growing an entrepreneurial business. This is horrible bad business and double jeopardy penalizing Independent workers. There is lots of confusion in the law and the language in this bad bill. I have attached exhibits that we need clarification on. One of these exhibits is from Lorena Gonzalez own Twitter on how a Business to Business Exemption works under AB 5. However, there is still a question with the ABC part of the test. Part “B” is what is problematic as I read the language and how the Labor Board and EDD do not support Lorena Gonzalez explanation and answers she is tweeting to the public about the B2B Exemption.

And, what about this language from the AB 5 bill. Does this fall under the Business to Business (B2B) exemption or the Referral Agency exemption, which states: Referral Agency Exemption AB-5 provides an exemption for businesses referring customers to providers for the following services: (1) graphic design; (2) photography; (3) tutoring; (4) event planning; (5) moving; (6) minor home repairs; (7) home cleaning; (8) errands; (9) furniture assembly; (10) animal services (11) dog walking; (12) dog grooming; (13) web design; (14) picture hanging; (15) pool cleaning; or (16) yard cleanup. If the service in question is not on this list then it does not qualify for this carve-out?

To qualify the referring agency must: Be an established business entity and must customarily perform work of this nature; Be “free from control and direction of the referral agency;” Not be penalized for rejecting clients and contracts; Be free to work with other companies and to maintain their own clientele without any restrictions from the referral agency; Provide their services under their name, rather than the name of the referral agency; Set their own rates (without deduction), decide their own hours and use their own tools; and Have any required business or contractor’s license and business tax registration.

In the language of the B2B Exemption, does the ABC test apply as the Labor Board and EDD are suggesting or is the B2B Exemption governed by the Borello test cited above? And, the points that are troubling are free from the hiring firm’s control and direction while performing the work (this must be set forth in the contract and be true in fact) and providing services directly to the contracting business rather than to customers of the contracting business.

AB 5 itself repeatedly says, “an individual – whether a sole proprietor, LLC, or corporation”. The B2B exemption is still problematic as the “B” prong of the 12-part criteria says it is not B2B if you are providing services for an end client and not the contracting/hiring entity.

Mr. Maienschein, this bill is very troubling, and jobs are being lost every day in many professional fields. This is not just affecting Uber/Lyft/Postmates persons. Industries are being decimated daily. I urge you to act on January 13 and amend or repeal this bill. California is seeing the unintended consequences of this disastrous piece of legislation that was not thought out to the impact and severity of the real-life monetary damages and wide professions and industries affected and being decimated.

Best Regards,

Sheryl Schane

Constituent of the 77th Assembly District

Sheryl Schane is a San Diego based, certified meeting and convention planner, with over 25 years in the Hospitality and Tourism industry. Of Particular Interest, Sheryl has provided meeting planning for corporations, Business Trade Associations and Chambers of Commerce all over Southern CA. Sheryl’s work includes planning, coordinating and managing onsite operations for several industries: Medical, Building, Technology, Insurance, Investment Banking, Financial Services and professional sports. In 1997, Sheryl represented the Downtown San Diego Partnership as a Business Community Liaison and member of the Superbowl Host Committee, one of two Superbowls in San Diego during the NFL’s 5-year swing rotation. The Impact AB 5 is having on Sheryl and the entire Meeting and Event Planning Profession is significant.