Posts tagged AB5
OPINION These new government contracting rules will put parents, caregivers, seniors out of work
March 12, 2024 // Many independent contractors we have engaged quit full-time positions to become caregivers. They sought opportunities like what we offer to stay engaged in their fields, have an intellectual outlet, and enjoy camaraderie with colleagues, while contributing to the family finances. They don’t want the pressure of short-term deadlines and in-person meetings; they don’t want to have to track time and explain about sick kids or field trips. Can we continue to offer these work relationships? Maybe, although the guidance that contractors cannot "perform similar work of employees" makes it fraught.
Op-ed: Congress tries to destroy working women’s flexibility
March 12, 2024 // Flexibility is valued by all workers, but more so for women. Women are more likely than men to prioritize hours and job location. A clear gender gap exists between men and women over compensation preferences: Women are flexibility maximizers, and men are pay maximizers. For millions of women, a W-2 job, even if hybrid or fully remote, cannot provide the level of flexibility they need to balance priorities such as raising children, managing a disability or illness, or caring for an aging parent. Consequently, over half of the nation’s 70 million-plus freelancers are women.
Everything You Need to Know About the Department of Labor Independent Contractor Rule
March 12, 2024 // The DOL does not provide an analysis of how many independent contractors will actually become employees. Let’s say a company is contracting with 100 photographers, all of whom are affected by this rule: how many of those photographers will become employees? It’s clearly not all 100 of them. To unpack the potential benefits (and costs) on workers, we need some analysis into how many of those 100 freelance photographers would become employees. Another consideration for the benefits side of the equation is whether most independent contractors are currently working with small businesses or larger ones. This matters because, as I point out in a previous post, many small businesses do not provide healthcare insurance, retirement benefits, or maternity benefits to their employees. This means that the “benefits” differences between an independent contractor and an employee at a small business are smaller than expected.
Beware the labor regs of March!
March 11, 2024 // A new rule from the federal government meant to protect workers is set to take effect today, March 11. It will instead leave most workers worse off by limiting their options for employment. Businesses will likely pull back from hiring entirely in many cases because the rules make it too risky. The rulemaking in question is the Labor Department’s (DOL) worker misclassification rule. The stated intent is to prevent situations where employers exploit workers. The rule is extremely vague on when business activities trip the line to exploitation however. DOL essentially leaves it up to federal regulators to decide. The rules won’t change things overnight. Regulators will still have to pursue cases based on them and court fights are sure to follow. But today is the day the mischief will officially start.
New Law Redefines Employees and Contractors
March 7, 2024 // Data suggest worker misclassification may be the exception rather than the rule in many industries. Surveys consistently show that most independent contractors prefer their independence. Around 79% of them prefer their arrangement over a traditional job, according to the U.S. Bureau of Labor Statistics, while fewer than one in 10 contractors want a traditional work arrangement. "Since a lot of older Americans do seek out these flexible forms of work as they near retirement — or after — this rule will likely lead to reduced work opportunities for them." Implemented in 2020 when acting U.S. Labor Secretary Su was California's labor commissioner, California's Assembly Bill 5, or AB5, similarly set out to protect workers by getting more people on the payrolls. But many Californians working as legitimate contractors suddenly lost income after businesses and nonprofits stopped working with them as freelancers and didn't hire them as employees.
Ranking Member Cassidy, Kiley Introduce CRA to Overturn New Biden Regulation Threatening 27 Million American Independent Contractors
March 6, 2024 // Independent contractors, or freelancers, make their own hours to fit their schedule and decide where and how they want to work. The Biden administration rule attempts to restrict the ability of American workers to be an independent contractor and take advantage of the flexibility it provides. The rule creates a non-exhaustive, six-factor litmus test for unelected bureaucrats to interpret and decide who is and who is not classified as an independent contractor. It also casts as large a net as possible and gives less legal certainty to independent contractors impacted by the regulation. “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,” said Dr. Cassidy. “This new Biden rule does the opposite, jeopardizing 27 million workers’ ability to make their own hours and make a living without being pressured into joining a union.”
Kiley, Cassidy Introduce CRA to Overturn New Biden Regulation Threatening 27 Million American Independent Contractors
March 6, 2024 // “Independent contractors, entrepreneurs, and small businesses are fed up with the Department of Labor continually breathing down their necks,” said Representative Virginia Foxx (R-NC), chairwoman of the House Education and the Workforce Committee. “The bicameral Congressional Review Act resolution led by Representative Kiley and Senator Cassidy offers Congress the opportunity to take a unified stand against the Department’s thirst for more government control over America’s workforce. Entrepreneurial opportunities and flexibility should be encouraged, not extinguished with heavy-handed mandates from the federal government.” “Gavin Newsom and Julie Su’s AB 5 severely restricted independent contracting in California, destroying thousands of livelihoods and harming California’s economy. As Acting Secretary of Labor, Su and the Biden Administration have announced a new Department of Labor rule, modeled after on the same job-killing AB 5 that will cost millions of independent professionals across the country their livelihoods while restricting the freedom of many millions more to have flexible work arrangements. Our legislation under the Congressional Review Act nullifies this terrible regulation and protects independent contractors,” said Representative Kiley. “Washington should support workers, not regulate them into oblivion.”
Independent Work Offers Hope for Financial Security for Women 50+
March 5, 2024 // “I have friends who are struggling in retirement because they lost good jobs at age 50 and could never find another career position despite years of job searching.” A 2017 field study bears this out. Conducted by the Federal Reserve Bank of San Francisco, the study revealed a 47% lower callback rate for older female applicants than young female applicants aged 29 to 31 years. For sales jobs, the callback rate was 36% lower for older female applicants. Because independent contracting is vital to keeping pre-retirement women attached to the workforce, it defies logic that legislators insist on stifling the very independent career opportunities that help these women supplement their income, stay active, and maintain a sense of purpose.
Commentary: Julie Su again headed toward DOL confirmation, trucking still opposed
February 28, 2024 // "No matter how many times she’s renominated, Julie Su’s record remains a huge red flag for our industry and any senator concerned about radical policies from California becoming federal law," said ATA President and CEO Chris Spear. "The independent contractor rule she just finalized as acting secretary undermines the livelihoods of 350,000 professional truck drivers across our country who choose to run their own small businesses, and she needs to answer for it."
Commentary: New Research Exposes Flaws in California’s Independent Contractor Law
February 28, 2024 // The theory behind both AB-5 and the DOL’s recently finalized regulation for classifying independent contractors or employees under the Fair Labor Standards Act is the same: by making it harder to maintain independent contractor relationships, independent contractors will be converted into traditional employees. The Mercatus study suggests this theory has failed in California. The question is whether DOL has learned anything from that example.