Biden admin spreading California's war on gig workers to rest of country
A law rejected in California is not a policy that should be pursued on a federal level
{{#rendered}} {{/rendered}}The Biden administration recently released a devastating policy that dismantles the gig economy. It jeopardizes the ability of 27 million Americans to work as independent contractors.
Independent contractors, or freelancers, make their own hours to fit their schedule and decide where and how they want to work. Incidentally, they are shielded from forced or coerced unionization that would strip that flexibility away. This has made eliminating freelancing a top priority for large labor unions who want more workers paying forced union dues.
The regulation attempts to achieve the goals of a policy California implemented called an "ABC test," a burdensome process that makes it essentially impossible for businesses to prove their workers are independent contractors and not direct employees, even if the workers themselves do not want to be classified as employees. The Department of Labor has not estimated how many millions of individuals would be impacted by their new rule losing their livelihoods but the experience of independent contractors in California is illustrative of what can happen at the federal level.
{{#rendered}} {{/rendered}}President Biden speaks about inflation and the economy in the South Court Auditorium on the White House campus, May 10, 2022. (Getty Images)
When California enacted an ABC test under AB 5, it had harmful effects on workers and businesses across industries.
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According to the American Trucking Association, AB 5 "wreaked havoc on [independent contractors], forcing many motor carriers to either engage in the wholesale reorganization of their business structures or leave California altogether."
{{#rendered}} {{/rendered}}The Owner-Operator Independent Drivers Association called AB 5 "contrary to decades of practice as well as federal laws and regulations" and "the most disruptive worker classification policy to be enacted anywhere at the state and federal level."
Independent contractor Dee Sova moved her trucking business after California passed its AB5 law.
Dee Sova, a single mother and independent truck driver, was forced to leave California after AB 5 threatened her ability to make her own hours so she could raise her children while still earning a living.
California’s entertainment and media industries also felt the repercussions of AB 5. In response to the law’s passage, Vox Media ended contracts with 200 freelance sports writers and replaced them with part-time employees.
{{#rendered}} {{/rendered}}IS NEW YORK THE NEXT CALIFORNIA ON GIG ECONOMY REGULATION?
The Recording Academy, the owner of the Grammy Awards and one of the world’s most prominent music organizations, publicly rebuked AB 5 for its harm on freelance musicians, including "untold costs for compliance, accounting practices, and new business expenses such as payroll processing to a musicians’ overhead."
AB 5 is deeply unpopular across the political spectrum in California. The Democratic governor and state legislature passed over 100 exemptions after it was implemented. In fact, the statutory exemptions are longer than the text of AB 5 itself. Fifty-nine percent of Californians voted to further weaken the bill.
{{#rendered}} {{/rendered}}The effort to restrict independent contractors was not only rejected by public opinion. The Department of Labor has admitted that under a Supreme Court ruling, a nationwide ABC test would violate federal labor law. To achieve the same goal of restricting Americans’ ability to act as independent contractors, the Biden administration released a rule this week that is broader and gives less certainty to independent contractors impacted by the regulation. It casts as large a net as possible with a non-exhaustive, six-factor litmus test for unelected bureaucrats to interpret and decide who is violating the law as they see fit.
Forcing this troublesome regulation onto Americans nationwide is the wrong move. However, the Biden administration’s push to eliminate independent contracting should not come as a surprise.
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{{#rendered}} {{/rendered}}President Biden’s acting Secretary of Labor Julie Su, who continues to serve without Senate approval, was the chief enforcer of AB 5 in California. Her decades-long record of promoting policies that undermine workers to the benefit of politically-connected labor unions is now on the national stage.
That is why I am introducing a Congressional Review Act (CRA) resolution to overturn this harmful rule and stand up for workers’ freedom to choose how to earn a paycheck.
The Biden administration’s priority should not be to do whatever makes it easier to forcibly and coercively unionize workers. It should be to increase individual freedom and opportunity.
{{#rendered}} {{/rendered}}President Biden links arms with Julie Su, his nominee to be secretary of Labor during an event at the White House, March 1, 2023. (Win McNamee/Getty Images)
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Unfortunately, this rule does the opposite, and jeopardizes the livelihood of 27 million workers who want the flexibility to make their own hours and make a living without being pressured into joining a union.
I urge my colleagues to support the CRA to repeal this harmful policy and support all workers, including those who do not want to be unionized and desire the freedom of being independent contractors.
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