In last week’s State of the Union address, President Joe Biden, who once the oath to be”The most pro-union president you’ve ever seentook the opportunity to approve the “Rights of Organization Protection Act”, commonly known as the PRO Act The long-discussed legislation, which was passed by the US House of Representatives in 2021, would represent the most. Comprehensive labor reforms In recent history. It is an attempt to return union power to its golden age, by ending right-to-work laws in 27 states and trying to severely limit employer-employee relations in other ways.
A key feature of the PRO law, however, has a distinct 2023 flavor: It would impose a stricter test to determine whether a worker is an independent contractor for union organizing purposes. This includes inevitable confusion about worker status and hefty fines if a worker is “misclassified” under the new definition. Although proponents tried to keep PRO legislation out of California failed Assembly Bill 5 (AB5), a legislative report published That it would effectively have the same effect nationwide.
Even if a worker is classified correctly, the complexity of the rules and their violations may still prevent companies—especially small businesses—from working entirely with contractors to afford extensive legal advice. that bad news In an economy where gig work is sometimes the best option for part-time, secondary, entry-level or flexible jobs (whether or not the labor movement acknowledges that).
The renewed support for the PRO Act comes as the Labor Department is also finalizing a new rule that narrows the definition of an independent contractor under the Fair Labor Standards Act. One factor driving these changes is that policymakers have limited understanding of the independent contractor workforce.
For example, while gig platforms like Uber, Lyft, and DoorDash are ubiquitous in our daily lives, workers on such online labor platforms are only 8.6 percent Overall independent contractor workforce. At the same time, the exponential growth of online labor platforms is driven almost entirely by individuals whose primary income comes from traditional jobs and who supplement that income with work on the platform. This will alleviate some concerns about the majority of the gig workforce lacking access to common workplace benefits such as health insurance.
Furthermore, according to Tax data, the industries with the largest share of independent contractors are “professional, scientific and technical services,” followed by “other services” and “health care.” It’s a different picture than the one we’ve been sold about the conquest of the American workforce by app-based ride-sharing and delivery-driving jobs.
Beyond this misunderstanding, there is a key question that proponents fail to answer directly: Over A dozen Survey— with the Bureau of Labor Statistics Contingent Worker Supplement—Has that most independent contractors would prefer their current arrangement to an employment arrangement. Workers cited dependent care obligations, personal circumstances, or a strong preference for work flexibility (rather than job stability) as primary reasons. Beyond the survey, a Recent research Published by Journal of Political Economy, economists estimate that UberX drivers would need to be paid nearly twice as much to accommodate the flexibility that comes with adopting a taxi-style schedule. And for the top 10 percent of DoorDash drivers, that equates to losing flexibility 15 percent pay cut.
But these flexible work arrangements can be especially transformative for women who are the primary caregivers of their families. one Research papers found that self-employment rates were higher for women with young children and that self-employed women workers had more flexibility in their work location, hours, and schedules than women in traditional employment. actually, study concluded that independent work opportunities give mothers “greater control over their work environment so that they can better manage their families while working.” inside SurveyWomen consistently indicate that they engage in independent work roles because they require flexible work arrangements.
This directly challenges the widespread narrative that the way to help independent contractors is to employ them. Instead, there are other options that can help this workforce. In a high-profile survey, 80 percent Indications among self-employed workers are that they want access to portable benefits—benefits that are flexible and not tied to a specific employer. this Long overdue For all American workers.
There is some bipartisan support for such a solution. Sense. Mark Warner (D–Va.), Todd Young (R–Ind.), and Rep. Introduced by Suzan DelBene (D–Wash.). the law To test a portable benefits program for independent workers. At the state level, this week, Utah introduced A new portable benefits bill that would remove legal barriers preventing companies from voluntarily offering benefits to their independent contractors.
Such innovative policy solutions are further advanced and welcomed by the millions of Americans who choose to engage in independent contracting work. Instead of reducing job opportunities and flexibility for those who want or need them, policy makers should try to better meet the needs of workers.