Biden Policies Could Spell the End of Freelance Contractors, Republicans Say

Amrit Singh, part-time Uber driver, in Manhattan, New York, on Aug. 22, 2016. Samira Bouaou/The Epoch Times

Republican members of Congress say President Joe Biden’s administration is waging war on independent contractors. Democrats counter that they are trying to ensure workers are not exploited and businesses compete on a level playing field.

Kim Kavin, a freelance writer from New Jersey, said this is not a partisan issue.

“Our members have voted for everybody from Bernie Sanders to Donald Trump,” Kavin told the Subcommittee on Workforce Protection of the House Committee on Education and the Workforce.

“All of us are in agreement on this.”

Kavin is one of five witnesses called before the committee for a hearing entitled “Examining Biden’s War on Independent Contractors.”

The hearing was called because the Biden administration is pushing a policy to deny Americans a fundamental right, according to Subcommittee Chairman Rep. Kevin Kiley (R-Calif.).

“Today’s hearing is about the right to earn a living. In a free society, few rights are as fundamental,” he said.

A driver wears a face mask and gloves during a caravan protest calling for California to enforce the AB5 law, in Los Angeles on April 16, 2020. Mario Tama/Getty Images

Biden is attempting to apply a California law that requires some companies to reclassify freelance workers as employees to the entire nation, Kiley said.  The law, AB5, was a disaster for California’s economy and would be equally devastating nationally, he added.

According to Kiley, the law had such a negative impact that a subsequent bill had to be passed exempting dozens of freelance jobs such as app-based delivery and ride-sharing businesses. He said California is an example of why the rest of the country should avoid its practices.

“We were the state where anyone could get ahead. Now we’re the state people can’t wait to leave behind,” Kiley said.

The subcommittee’s ranking member said the real issue is how to protect workers’ rights, benefits, and legal protections when they are misclassified as independent contractors.

“The misclassification of workers as independent contractors is a problem,” said Rep. Alma Adams (D-N.C.).

Gig Workers Have Fewer Protections

According to Adams, independent contractors have fewer legal protections, do not qualify for unemployment benefits, and don’t have to be paid a minimum wage. In addition, they said companies that hire contractors could underbid their competitors because they don’t have to pay unemployment or Social Security Taxes.

The freelancers on the panel said they were willing to forego such benefits in exchange for controlling their schedules and work product.

Karen Anderson is the founder of Freelancers Against AB5. She said her organization began as a social media account for freelancers to air their concerns and complaints about the law. She said she was surprised by the volume and nature of the complaints.

“Entire sectors [of business] have been negatively impacted,” Anderson said.

David Long is the chief executive officer of the National Electrical Contractors Association based in Washington. He said contractors who classify employees as independent contractors can underbid their competitors by up to 40 percent. He said his members don’t want to harm employees.

Open and Fair Marketplace

“Responsible contractors want an open and fair marketplace,” he told the committee.

The Biden administration has been pushing the Protecting the Right to Organize (PRO) Act. This law would significantly increase the power and influence of unions while reining in employers regarding employee organizing in the workplace.

The PRO Act passed the House of Representatives in June 2021. A companion bill, S.420, is currently in the Senate Committee on Banking, Housing, and Urban Affairs.

The law also includes a redefinition of the term “Independent Contractor” using a three-point test similar to the test in AB5.

According to the PRO Act, a worker is an independent contractor if he is “free from control and direction in connection with the performance of the service, both under the contract for the performance of service and . . . the service is performed outside the usual course of the business of the employer; and, the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”

New Labor Department Rule

The Department of Labor issued a rule in 2021 to clarify the matter. But witnesses disagreed over the validity of the rule’s new six-point test.

Tammy McCutchen is a senior affiliate with Resolution Economics of New Market, Tennessee. She said the Department of Labor test is so broad that it can be interpreted in whatever manner the person applying the standard chooses.

“The DOL can consider any fact it wants, or refuse to consider any fact it wants,” she said. “The Biden administration, with no notice and no rule changes, could implement California AB5, the unpassed PRO Act, or use a Ouija board to determine who is an employee and who is an independent contractor.”