Given that AB 5 is the law, what should court reporters do now?

[LAST UPDATED: 12/4/2019]



This information is NOT intended to substitute for legal advice from your own counsel and tax advisor.

Ok, so now what? AB 5 codified in an official kinda way what was already the precedent known as 'Dynamex' (pronounced 'dynamics') since April, 2018. Every freelance court reporter -- and I would argue official court reporters too -- are affected. I've written plenty on that already on this blog. But today's post is about what to do now.

I plan to keep adding to this list but here's what I'm thinking so far:

Contact your attorney and CPA to see how AB 5 affects you in your own specific situation.
Likely you should get a business license.
Likely you and your attorney/CPA will want to discuss forming a legal entity for yourself. This entity would probably include a fictitious business name (DBA), Sole Proprietor, LLC, or S-Corp. (A few CPAs I know are offering special packages just for court reporters to incorporate. Check out Tejas Mehta or Phil Liberatore. ) Is incorporating the magic bullet? Unknown. But there is very good legal research going on that supports the notion that AB 5 affords a B2B exemption.



Toni Pulone from Pulone Reporting Services:

There are two secure means of establishing yourself as a business. One is to incorporate, and whether you're benefitted by filing as an S or C corp is a better question for a CPA. Our firm found S-corp status was preferable, but you may get different advice on that. If you prefer not to incorporate, you can instead verify yourself as a business by getting a business license from the city where your home office is located -- in San Jose, our license fee was $195.00, as an example -- and then file for a Fictitious Business Name (FBN), which you file with your County. You select the business name that you wish to operate under, e.g. Mary Smith, CSR 1111, and assuming there is no one else with that FBN, you'll be granted that name. Then that becomes your business name, and all pay should be made to you under that business name. The FBN is relatively inexpensive; ours from Santa Clara County cost about $36.00, and it's good for five years, after which you renew it for another five years. And the business license and FBN don't require the assistance of a CPA or attorney and are easy and fairly quick to get done, so you may find that the simplest way to secure your status as an independent business owner and not an employee of any reporting firm from which you may accept reporting assignments.

Likely, you would submit invoices to court reporting agencies from now on. That means you don't rely on 'their rates' but instead give them your rates on an invoice, per job. That means you treat the relationship like any normal business to business relationship. Your attorney/CPA will guide you on the specifics of this for your business, so consult them.
Educate yourself on what AB 5 means. There's tons of resources out there now. My blog is hopefully just a first stop on your journey. I also created AB5info.com for a good repository of AB 5 stuff from various industries including court reporting.
Contact DRA and CCRA and let them know you are interested in AB 5 and having them push an agenda for a carve-out from the law. Both associations must work together to lobby for this. Your voice is important and powerful. They will listen to you.
Contact your local legislator to let them know that court reporters need an exemption in AB 5. http://www.legislature.ca.gov/your_legislator.html
Don't panic. A solution will be found. Court reporting will not come to an end. Things may change but there is an irrevocable necessity for what court reporters provide to the legal community.


GRASSROOTS

Please take part in the grassroots effort to get an exemption in AB 5. Here is what to do -- write an email to the four legislators listed below as soon as possible. Additionally, CC the emails of the CCRA and DRA leadership. You can easily cut and paste and use the wording that is included. [Courtesy Tom Lange, CSR from ROYAL PHILLIPS]

Dear Senator Hill/Assemblywoman Gonzales:

I am a shorthand reporter certified in California, and work as an independent contractor for court reporting agencies. It is very important to me that I remain an independent contractor as I require the flexibility that being an independent contractor provides. I want to be able to accept or reject assignments as fits within my schedule, and enjoy being my own boss without having to take direction from another company or be required to work as the firms may need me. Being treated as an employee would be detrimental to my work life and I would see that as an inferior situation to my current one. [Add any other reasons you like being independent, such as working for multiple firms, taking unlimited vacation, etc]

I urge you to address the problems created by the Dynamex decision by making sure court reporters are treated as independent contractors.

Thank you for your attention to this important matter.


Legislator Email Addresses:

1. Assemblywomen Lorena Gonzalez: assemblymember.gonzalez@assembly.ca.gov
2. Shubhangi Domokos, Legislative Assistant for Assemblywoman Gonzalez: shubhangi.domokos@asm.ca.gov
3. Senator Jerry Hill: senator.hill@senate.ca.gov
4. Gideon Baum, Consultant - State Senate Labor, Public Employment & Retirement Committee: gideon.baum@sen.ca.gov

CCRA and DRA leadership:
sandy.walden@cal-ccra.org
aimee.skochko@cal-ccra.org
mike.hensley@cal-ccra.org
cara.foster@cal-ccra.org
rachel.barkume@cal-ccra.org
stella.angeles@cal-ccra.org
lauren.biggins@cal-ccra.org
tamara.houston@cal-ccra.org
louis.machuca@cal-ccra.org
regina.demoville@cal-ccra.org
brooke.ryan@cal-ccra.org

Toni Pulone, DRA’s legislative chair - apulone@pulone.com


This information is NOT intended to substitute for legal advice from your own counsel and tax advisor.


Tuesday, November 05, 2019

Author
Todd Olivas

Todd Olivas is a court reporter and entrepreneur.
He founded TO&A in 2003.

  Comment by Diane Freeman | Friday, November 15, 2019
This is excellent.
  Comment by Lynden Glover | Saturday, November 23, 2019
Excellent post!!!
Lynden

  Comment by Dana Shelley | Wednesday, December 04, 2019
I am a freelance court reporter in the Los Angeles area. Thank you for the excellent information on AB5. I was quite dismayed and alarmed to think that my profession in terms of the way I do business might come to an end in a few short weeks. How would I pay my bills, meet my financial obligations? Your reasoned explanations have restored some calmness. I look forward to staying on top of the scene by reading your further posts.


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