In early August 2018, a group of language industry representatives went to Washington DC to lobby Congress and “sound the alarm over new, ‘disruptive’ employee classification regulations”.

At the center of the storm is a landmark April 2018 ruling by the California Supreme Court, which ruled that delivery service company Dynamex misclassified its workers as independent contractors when it should be treating them as employees. The Supreme Court adopted California’s narrower version of what it means to be an independent worker, known as the so called “ABC” test, which says:

(A) that the worker 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;

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(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

The California ruling followed a number of legal cases involving language service providers (LSPs) and how their workers are classified. In March 2018, government services contractor SOS International (SOSi) was ordered to reclassify some of its interpreters as employees. A NLRB ruling meant that SOSi’s interpreters working in the US state courts should be classed as employees rather than independent contractors, and be entitled to employee benefits such as paid leave.

Barry Slaughter Olsen, Associate Professor of Translation and Interpretation at the Middlebury Institute of International Studies (MIIS), said at the time that “requiring that all interpreters under the contract be reclassified as employees will simply break the system.”

In April 2018, a group of software testers, who worked at Microsoft but were employed by Lionbridge, agreed to settle a case they had brought before the National Labor Relations Board.

Industry Steps up Lobbying

To lobby Congress, on August 8, 2018, a group of more than 50 language industry representatives met on Capitol Hill to demonstrate concern for the impact the labor changes could have on the industry. Professionals gathered at the Association of Language Companies (ALC) summit, held in Washington DC, to coordinate a response. The event, the Washington Leaders Forum, was organized by JNCL-NCLIS, in partnership with ALC.

Rick Antezana, President of ALC, argued that “there is a critical distinction between the gig economy and what professional translators and interpreters do, which we refer to as the ‘knowledge economy.’” The key distinction is that typically knowledge workers are highly trained and qualified for a particular profession, while the gig economy has a much lower barrier to entry.

The group also fears that “the added cost of providing full benefits to every single contractor would likely put many California LSCs [LSPs] in danger of going out of business, or force relocation of operations to another state or country.”

The delegates feel that the implications for the industry could be devastating, particularly as many of the small companies that make up the language industry landscape will be hard pressed to support linguists as full time employees. There could also be a knock-on effect on the many industries that the language industry services: not least government, which spends hundreds of millions if not billions of dollars on languages services.

Turbulent Times

It is hard to predict how the Dynamex ruling will eventually play out across the US language industry, and California’s in particular. But if one takes the ABC test to its logical conclusion, it does not require a lot of imagination to see that the language industry, where the vast majority of linguistic work is performed by freelance contractors, is headed for turbulent times.

The B in ABC, for example, is very likely to be a major source of problems. It is hard to see how a language service provider could argue that a freelance translator or interpreter performs work that is “outside the usual course of the hiring entity’s business”.

Finally, large LSPs such as Lionbridge, Welocalize or RWS-owned Moravia generate significant revenue from staffing contracts with major technology companies. The Dynamex ruling may also affect how these contracts are viewed going forward.

This is a developing story, which Slator will continue to monitor. Please reach out to Slator if you own or run a language service provider or if you are a freelance translator and would like to share your take on the issue.