Gerard Scimeca – co-founder CASE
March 9, 2021
March 9, 2021
If passed, the bill will spell disaster for these contractors throughout America, stripping them of their job, their right to work as they choose, and, in many cases, their extra source or even mainsource of income. These individuals are not only Uber drivers, but healthcare professionals, , freelance writers, healthcare workers, insurance salespersons, financial advisors, and many other professions who rely on being independent and work with multiple publications, hospitals and clients. The impact on the U.S. economy would be nothing short of catastrophic, and that’s precisely why Congress must vote against it.
Without question, the situation sounds serious. But what, you may be asking, even is the PRO Act, and why is it so detrimental to the American workforce?
The Protecting the Right to Organize (PRO) Act is a piece of legislation initially introduced in February 2020. Passing through the House but dying in the Republican-controlled Senate, the bill was reintroduced amid the Democrats’ takeoverin 2021. The PRO Act seeks to overrule states’ “right-to-work” laws, bolster the power of unions, and reclassify independent contractors as employees. To do this, the bill would implement the far-reaching and immensely controversial regulation known as the ABC Test.
The ABC Test is a rule designed to reconfigure the laws surrounding worker classification. Specifically, it would force all existing independent contractors to reclassify as full-time employees unless they meet each of the three requirements outlined under the test. Those being:
“(A) the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact; (B) the service is performed outside the usual course of the business of the employer; and (C) 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.”
These restrictions on independent contractor classification might not seem too onerous at first glance. One might even question how much damage these three simple rules could really do. But don’t be fooled: the legacy of the PRO Act is replete with failure. We need only look to the bill’s predecessor—California’s AB 5—to confirm that truth.
The PRO Act’s ABC Test was actually cribbed from California’s AB 5, a law that also sought to reclassify independent contractors as employees, only at the state level. However, the law was absolutely devastating to California’s workforce, displacing some two million workers by reclassifying them via legislative fiat. Countless testimonials illustrate the suffering that AB 5 caused, with writers to musicians, translators to actors expressing how they lost their job or business because of the law.
AB 5 has been roundly condemned as a failure, as an overwhelming majority of the state’s own workers have expressed dissatisfaction with the law and supported exemptions. But now, through the PRO Act, legislators are pushing that same failed framework on a national scale. Needless to say, the potential consequences of the PRO Act’s passage would be dire.
In the United States currently, independent contractors comprise anywhere between 10 to 33 percent of the American workforce. They form an essential component of the economy, complementing the work of full-time employees, not existing in opposition to them. For generations, even before the pandemic, Americans have found opportunity in side businesses as a source of supplemental income. Yet, under the PRO Act, millions of these independent contractors would be forced to reclassify—and entire industries would be thrown into chaos.
Individuals who value the freedom and flexibility that independent contracting provides will have fewer opportunities to find their preferred work. Under the PRO Act, the economy will shrink, and unemployment will grow—precisely the opposite of effective labor policy, particularly amid a pandemic.
Behind the PRO Act trails a legacy of failure, with both AB 5 and the ABC test portending the dangers associated with the bill. From the tragic experiences of California’s independent contractors, we know that laws like the PRO Act simply won’t work. In passing the legislation, Congress would destroy the very economy it’s seeking to bolster and harm the very workers it desires to help. For that reason, the House of Representatives should undoubtedly reject the PRO Act.
