Posts tagged Worker misclassification
‘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.
New Study on California AB5 and Implications for the Department of Labor’s Independent Contractor Rule
January 18, 2024 // 1. First, employers may have hired some, but not most, independent contractors as employees, while other employers may have stopped working with their contractors based in California altogether. 2. Second, some employers may have extended employment opportunities to independent contractors who then declined such offers. Workers with a strong preference for flexible hours or for working with multiple clients, for instance, may not have wanted to work as traditional employees with one company. 3. Third, some small business owners may have been forced to shut down if they relied heavily on independent contractors and could not afford to hire them as employees or stopped working with independent contractors because of fear of compliance. This was highlighted by interviews of small business owners in the wake of AB5.
Trucking groups slam DOL’s new worker classification rule as ‘un-American’
January 10, 2024 // The coordinated release of this rule with the renomination of Julie Su to lead the Department of Labor is proof positive that the Administration is doubling down on destructive policies that eliminate choice and opportunity for our workforce. Had Su actually taken the time to talk to independent contractors, she’d know firsthand what a misguided rule this really is. That is exactly why we opposed her nomination before and why we will continue to oppose it now. Radical California agendas have no place in federal policy.” Spear vowed that the ATA “will work with members of Congress and other stakeholders to defeat this ill-advised rule.” In a statement, the Intermodal Association of North America (IANA) called the new requirements “burdensome,” adding that they “significantly limit the use of independent contractors in the trucking industry and threaten to force the reclassification of over 80 percent of intermodal drayage drivers that currently enjoy independent contractor status.”
Michigan Legislature Is Mulling An ABC Test
October 13, 2023 // The local Chamber of Commerce warns there will be no exemptions for Michigan’s independent workers (unlike California’s AB5 which exempted over 100 occupations). The Great Lake State currently employs the Internal Revenue Service (IRS) 20-factor test, which is more amenable and receptive to flexible work arrangements. HB 4391, on the other hand, would create an independent contractor disclosure notice to “self-report alleged misclassification issues” to accompany HB 4390. This timing isn’t coincidental. Michigan repealed its right-to-work law earlier this year. As I noted at IWF back in April, here’s the immediate fallout from repealing right-to-work:
7-Eleven, Franchisees Renew Battle Over What Defines a Worker
July 26, 2023 // The franchisees say a lower court wrongly concluded that they don’t perform services for the company and refused to apply Massachusetts’ “ABC test” for determining whether those who run the stores are employees or independent contractors, contradicting a 2022 state high court answer to a certified question earlier in the suit’s judicial odyssey. The c-store chain urges the US Court of Appeals for the First Circuit to leave the lower court’s decision in place. The lawsuit, 7-Eleven’s lawyers said in their appellate brief, is an attempt to turn the state’s independent contractor law “into something it was never intended to be—a tool for business owners, like Plaintiffs, to recover as ‘damages’ three times the value of their business’s operating expenses, including their payroll and the fees they pay for their franchise rights.”
Are Unionized Gig Workers The Future Of Work?
June 2, 2023 // Additionally, some unions—because of a lack of resources—aren’t able to take the most direct approach to helping gig workers. “Unfortunately, right now there are some unions that have taken a ‘strategic’ approach of trying to work with the companies and become their labor partners,” says Dryburgh. “In May 2021, they tried getting a law passed in NYC that would provide Independent Drivers Guild and Transport Workers Unions fees for representing workers that would come from fares and delivery fees. The problem with these laws is that while they provide immediate benefits to workers, they create these carveouts that prevent app-based workers from being classified as employees. These kinds of deals can have irreparable consequences for the rest of the labor movement. If the new standard of whether you are an employee depends if you get your job through an app, all W2 employees are in trouble.”
Reclassifiying Rhode Island’s independent workforce could cost the state millions
May 25, 2023 // Actual instances of misclassification are already addressed by existing laws. And if workers desire to obtain benefits, health care, or otherwise, they need not be traditional employees to do so. To prevent forced misclassification in Rhode Island, lawmakers should propose reforms like portable benefits to allow workers to maintain their independence yet apply for benefits as needed. Utah just pioneered this reform to allow worker benefits to follow workers, not employers. With a portable benefits system in place, forced reclassification efforts like SB 430 can be defeated. As of December 2022, 27 percent — or 85,116 self-employed gig workers — of Rhode Island’s small business workforce engages in independent contract work. That should be celebrated, not undone by misguided policymaking that seeks to correct a non-problem.
Businesses Cry Foul on DOL Messaging for Trump Gig Worker Rule
May 8, 2023 // “My discussions with DOL investigators and the solicitor’s office out of Atlanta was exactly the same before the Trump regulations and after the Trump regulations,” McCutchen said. In her interactions with the agency, WHD investigators mentioned and recognized the agency was bound by the Trump rule, but didn’t follow the structure of the Trump test when analyzing whether one of her clients was a contractor or an employee, she said. “They didn’t say, ‘Let’s look at the two core factors,’” she explained, “or, ‘Now we’re going to look at the three additional factors,’ which is the structure of the Trump regulations. They didn’t do that.” The Trump rule has been in place for over two years, and given how it diverged from the Obama-era approach to worker classification, the department should be reaching out to field officers and offering training and guidance, said Michael Lotito, co-chair of Littler Mendelson PC’s Workplace Policy Institute. Simply acknowledging the rule isn’t enough, he added.
DOL Nominee Julie Su An Aggressive Enforcer, Inept Manager
March 8, 2023 // She was also a supporter of the state’s disastrous AB5 law, which was intended to force rideshare companies and other so-called gig economy businesses to treat their workers as regular employees rather than short-term workers. Su tweeted in 2019 that the law was “about preserving labor standards that are key to quality jobs in California.” There was little evidence the law wanted by or beneficial to rideshare drivers. Meanwhile numerous other traditional freelancing jobs were disrupted by the law, forcing state legislators to amend the bill to carve out many professions. Eventually state voters would pass Proposition 22 which exempted rideshare drivers from the law, stripping out the main thing its advocates wanted. The law contributed to California lagging behind the rest of the nation in jobs during the pandemic. Ironically, Su, should she be confirmed, will have another shot at it. The department already has a rulemaking in the works to go after employers for “worker misclassification” i.e., classifying them as freelancers rather than regular employees for whom the company must pay overtime and unemployment –a national version of AB5, with all the problems of that law.
Department of Labor Rule – Coalition Letter
July 22, 2022 // The January 7, 2021 DOL rule has provided clarity to the decades-old economic realities test for the modern workforce, helping to apply determinations in light of the different types of work and technologies used to work and connect with customers today. Instead of removing this clear and sensible standard and attempting to diminish or eliminate independent contracting, we urge you to preserve paths to self-employment that allow tens of millions of working Americans, parents of children with special needs, workers seeking career changes, disabled workers and workers caring for disabled family members, and entrepreneurs growing small businesses of their own to pursue work on their own terms. Brent Wm. Gardner, Brandon Arnold, Grover Norquist, Michael J. Lotito, Greg Sindelar, Krisztina Pusok, Ph. D., The American Consumer, American Legislative Exchange Council, Lisa B. Nelson, Center for Freedom and Prosperity, Andrew F. Quinlan, Robert Fellner, Heather R. Higgins, Independent Women's Voice, Bethany Marcum, Alaska Policy Forum, Mike Stenhouse, Mike Hruby, New Jobs America, Paul Gessing, Rio Grande Foundation, Seton Motley, Less Government, Robert Alt, Steve Delie, Brian Minnich, Daniel Erspamer, Pelican Institute, Eric Peterson, Pelican Center for Technology and Innovation, Randy Hicks, Georgia Center for Opportunity, Alliance for Opportunity, Jeffrey Mazzella, Center for Individual Freedom, Douglas Carswell, Mississippi Center for Public Policy, David Williams, Taxpayers Protection Alliance, Ryan Ellis, Center for a Free Economy, Phil Kerpen, American Commitment, James Taylor, The Heartland Institute, Adam Brandon, FreedomWorks, Elaine Parker, Job Creators Network Foundation, Brandon Dutcher, Oklahoma Council of Public Affairs, Thomas A. Schatz, Citizens Against Government Waste, Justin Owen, Beacon Center of Tennessee, Matthew Kandrach, Consumer Action for a Strong Economy, Charles Mitchell, Commonwealth Foundation, James L. Martin, 60 Plus Association, Saulius “Saul” Anuzis, 60 Plus Association,