Posts tagged reclassification
Economically Devastating Rent-Seeking in America’s Labor Markets
June 9, 2026 // Nowhere is rent-seeking more pervasive—or more costly—than in America’s labor markets. From compulsory unionism to occupational licensing, prevailing-wage laws, gig-worker reclassification rules, and strategic minimum-wage campaigns, concentrated interest groups (often unions and incumbent professionals) routinely use state power to extract “rents” from workers, employers, taxpayers, and consumers. These are not abstract economic theories. Rent-seeking is an everyday mechanism that distorts wages, limits opportunities, and transfers trillions of dollars every year, creating harmful economic inefficiencies penalizing employees, employers, taxpayers, and consumers. Compulsory Unionism: The Textbook Case of Labor-Market Rent-Seeking Compulsory unionism
Trump strips civil service protections from thousands of workers
June 8, 2026 // The reclassification is part of a wider campaign by Trump to downsize the civil service and realign it toward his policy goals. The administration has developed rules to have federal employees sign nondisclosure agreements, extend suitability standards, end certain layoff protections, cap performance ratings and weaken safeguards for probationary workers. Office of Personnel Management Director Scott Kupor told reporters the administration needs people in policy-making positions willing to carry out the president’s directives. It doesn’t matter what political views those federal employees may have, he said. “But if you allow those views to basically interfere with your willingness to actually carry out lawful orders and policy directives of the administration, then this provides a mechanism, obviously, for people in those agencies to be able to be removed effectively at will,” Kupor said.
Commentary: The Federal Government Just Moved to Restore the Owner-Operator Model – Here Is What Actually Changed, What Did Not, and What You Still Need to Watch
March 16, 2026 // Three times in five years. That is how many times the federal standard governing whether an owner-operator is legally classified as an independent contractor or an employee has fundamentally shifted under the Fair Labor Standards Act. The 2021 Trump rule. The 2024 Biden rule. And now, on February 27, 2026, the Department of Labor’s formal proposal to rescind the 2024 rule and return to something close to the 2021 framework. Each time this pendulum swings, the trucking industry produces a wave of celebration or alarm depending on which direction it moved. The industry’s reaction to this latest move has been heavily celebratory — and not without reason. But if you are running a small fleet or operating as an owner-operator, the celebration needs to come with a clear-eyed understanding of what this rule change actually does, what it does not do, and where the real risk to your business model still sits.
Proposed NJ regulations would impact up to 1.7 million self-employed workers
August 5, 2025 // Director of Independent Women’s Center for Economic Opportunity Patrice Onwuka told The Center Square that “New Jersey is proposing to alter its employment test that determines whether a worker is an employee or an independent contractor.” Onwuka said that “instead of greater clarity, simplicity, and certainty, the NJ Department of Labor is introducing new uncertainty, confusion, and complexity” with this ABC test. The ABC test would go from three one-sentence factors that must be met to prove independent contractor status to three factors each burdened by numerous sub-factors or, as shown in an Independent Women news release.
Op-Ed: Question 3 Still a Question: Massachusetts’ Experiment in Sectoral Bargaining for Gig Workers
April 10, 2025 // These impracticalities explain why Question 3 embraces sectoral bargaining. Under this regime, once the drivers form a union, that union will represent all the drivers in the state, no matter what rideshare company they work for. (Rideshare companies can also team up to simplify the negotiations.) This will put the drivers in a vastly superior bargaining position than if they had to incrementally organize smaller units of drivers or even company by company, as is the norm under the NLRA. Under the NLRA, organizers would next have to get the support of 30% of drivers in a bargaining unit before being able to call an election. But how do organizers reach that 30%? For rideshare drivers, there is no workplace where everyone congregates. The closest equivalent is the airport parking lot, where many drivers wait to get a ride request. But to even encounter 30% of drivers there, much less to convince that 30%, could be a prohibitively high bar. Additionally, driver turnover is high. By the time 30% is convinced, those drivers may have moved on, a new cohort taking their place. Part-timers also pose a problem. For these reasons, Question 3 requires that the would-be union collect signatures from only 5% of Active Drivers (defined as those that have completed more than the median number of rides in the last six months). That is a much more plausible bar to clear, given that rideshare drivers are quite literally a moving target, in time and in space.
What was the impact of AB5 on California’s marginalized communities?
March 31, 2025 // Esther Hermida, a representative of the American Alliance of Professional Translators and Interpreters (AAPTI) testified about AB5’s impact on thousands of citizens in her industry comprised of 75 percent women. One professional translator, Ildiko Santana, reported she started her small business in 2000 as an immigrant and woman of color. She lost all 50 clients and all her income in 2020 when AB5 went into effect.
Opinion: Congress Must Oppose Big Labor’s “PRO Act” Power Grab
March 14, 2025 // In the 2024 election cycle, labor unions gave nearly 90 percent of their political donations to Democratic Party candidates. For large unions like the National Education Association (NEA), as much as 99 percent of political donations went to Democrats. The PRO Act is a return on investment for the hundreds of millions of dollars that union bosses continue to pour into Democrat coffers.
The Next Wave Commentary: Kim Kavin
March 4, 2025 // In the wave of freelance busting that started with California’s Assembly Bill 5, the method of attack was the reclassification of independent contractors as employees. That method created massive backlash everywhere it was tried, so now, a new method is being tried. That new method is called sectoral organizing. This strategy of freelance busting in multiple states is usually a setup for a nationwide attack against us all. Independent contractors nationwide just learned this the hard way, with California’s Assembly Bill 5 ultimately leading to the introduction of the federal Protecting the Right to Organize Act. The freelance-busting brigade is, once again, doing a test run of its idea in the states, with bigger ambitions on the horizon.
Frisard’s Transportation v. Department of Labor
June 26, 2024 // And the rule affects far more than the 350,000 owner-operator truckers that operate across the nation. It will affect 70 million freelancers in industries across the country, pushing them towards an employment status when 80% of them want to be independent. Similar legislation in California led to a loss of over 10% of freelancers. With the help of the Pelican Institute, Frisard’s has filed a lawsuit against the Department of Labor, arguing that the new rule is arbitrary and exceeds the department’s statutory authority. The company asserts that the rule undermines the certainty businesses and independent contractors need to operate efficiently and is inconsistent with the Fair Labor Standards Act and precedent set by the U.S. Supreme Court and the Fifth Circuit.