Posts tagged Mercatus Center
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.
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.
Op-ed: Watch out — California’s damaging gig workers law is going nationwide
February 20, 2024 // The rule is slated to take effect on March 10. U.S. Sen. Bill Cassidy (R-La.) and Rep. Kevin Kiley (R-Calif.) have both declared they will use the Congressional Review Act to have this rule rescinded. Previous legislation has been tendered in support of small businesses and the self-employed. The “Fight for Freelancers” group of female writers and editors has filed a lawsuit challenging this rule, which serves to appease Big Labor in the same manner as AB5.
Commentary: Why we just sued the US Department of Labor
February 6, 2024 // As one of us testified before Congress last year, the Biden administration remains relentless. It’s now attempting a regulatory workaround with the Department of Labor’s independent contractor rule, which, in a cruel twist, was released just days before Mercatus Center research showed that the protesting independent contractors have been right all along. Mercatus found that the California approach not only failed to create unionizable jobs, but actually decreased overall employment by 4.4 percent and self-employment by 10 percent. Mercatus also noted that this happened despite California ultimately exempting more than 100 professions. The new Labor rule exempts none. The department acknowledges there may be “conceptual overlap” with the California law’s most harmful language. We agree. What’s worse is that the Labor rule is so vague, it’s impossible for anyone to know how to operate legally with independent contractors. The Biden administration sees this as a feature, not a bug.
OPINION: Biden’s war on working women
February 5, 2024 // But given the administration’s bent toward categorizing workers as employees (in an effort to ramp up unionization), the prospects of retaining their independent status look bleak for the nation’s 70+ million independent workers. Over half of freelancers are women. They earn full-time, part-time, or occasional incomes through various occupations that include—but are not limited to—the gig economy. Think about virtual assistants, marketing professionals, transcriptionists, makeup artists, entertainers, and medical assistants. SEE ALSO Goodbye, wage gap. Hello, partner gap. As true take-home-pay equality looms, psychologists warn it could interfere with women’s evolutionary drive to seek out a partner who provides. Women ultimately may pay the price for finally earning as much as men They depend on flexibility to work around their priorities, such as raising families, caring for aging parents and sick spouses, or managing their own illnesses and disabilities.
‘Independent Contractor’ Rule Latest Dumpster Fire Exported From California
January 31, 2024 // One of those infamous policies and the havoc it’s bound to wreak has gone national, thanks to labor department rules issued by the Biden administration. A 339-page Department of Labor rule – you can always count on the federal government to keep it pithy – would make it much harder to be an independent contractor or freelance worker in America. Created to replace a simpler Trump-era rule, it’s modeled on AB5, a disastrous 2019 California law that made independent contracting and freelance work so hard to do that it effectively outlawed it in the Golden State.
Op-Ed: Labor Department stuck in 1930s with rule against independent contractors
January 23, 2024 // With a national rule, however, few of those escape options are possible. Freelancers are unlikely to flee the country, and there is no such thing as a national ballot measure. The department has only just finalized the rule, so revisions are unlikely unless there is a change in control of the executive or legislature this November. Independent contractors face an extremely uncertain future. The reason why the rule is likely to be such a problem is because it is based on a vision of what the workplace should look like from a century ago, when large corporations dominated. Large corporations made sense when it was harder to be nimble as a business. Nobel Prize winner Ronald Coase explained the reason we have corporations at all is because of the presence of what are called transaction costs. If I have a business idea that requires the services of someone else, I face those costs. If the business idea requires someone with advanced mathematical calculation skills I don’t have, I can either contract with someone who has those skills to do the work every time I need it, or I can hire them as an employee instead and have them always available.
New Research Quantifies Harms To Independent Contractors Of California’s AB5
January 23, 2024 // Despite AB5 proponents’ claims that the law would increase full-time employment and offer benefits and protections, the researchers found “robust evidence that AB5 is significantly associated with a decline in self-employment and a decline in overall employment.” · AB5 reduced the level of self-employment by 6.7 percentage points to 28%. · AB5 reduced the level of overall employment by 7.3 percentage points to 14%. · The researchers did not find significant evidence that AB5 increased W-2 employment.
California’s Attack on Gig Work Predictably Drove Workers Out of Jobs
January 19, 2024 // Last week, the DOL announced a new set of rules for determining whether a worker is an employee or an independent contractor. Like with California's A.B. 5, those proposed federal rules are meant to crack down on what the government sees as a deliberate effort to misclassify workers as contractors—which can change, among other things, the benefits that an employer is obligated to pay. Most gig workers and independent contractors are content with their more flexible, less structured employment arrangements—so in some sense, these governmental efforts seem to be trying to save workers from their own choices.
Rep. Kevin Kiley Fights for Freelancers Against Julie Su Nom in First Workforce Protection Subcomittee Hearing
April 21, 2023 // Through the PRO Act, DOL rulemaking, and installing those who will do their bidding atop federal government agencies, the establishment Democratic Party, in lockstep with the Big Labor lobby hopes to force tens of millions of Americans out of freelancing and independent contracting and into “employee” status, which would allow the unions to focus on organizing new sectors in the face of dwindling membership. Rep. Kiley has fought against these efforts every step of the way, first in the California State Assembly and now in Congress, and called the hearing to highlight just how destructive the Biden/Su agenda will be to all Americans, and not just Californians, and has called Su “the architect and lead enforcer of AB-5.”