From The Hill, Steve Delie and F. Vincent Vernuccio argue in favor of keeping the Trump administration’s new rule for classifying workers as independent contractors. Steve and Vincent write:
Under this test [the new rule], workers who are truly employees will be treated as such, but those working for themselves will be free to do so. Unfortunately, the rule soon may come under fire from the new president.
That’s because President Biden favors the “ABC” test that underlies California’s notorious AB-5 bill. The ABC test makes it hard for independent workers to have their own businesses. Before multiple exemptions were added through new legislation and voters approved a ballot initiative, AB-5 wreaked havoc on California’s independent contractors. The result was loss of flexibility, income and, in some cases, people moving out of the state so they could continue to work.…
One estimate shows that if the ABC test were expanded nationwide, it could cost employers as much as $12.1 billion annually.
Biden’s support for the ABC test relies on the argument that companies, particularly those in the gig economy, are misclassifying their workers to avoid paying benefits. The problem with this argument is that many independent contractors simply don’t think they’re being mistreated. In fact, fewer than 10 percent of workers currently classified as independent contractors want to be reclassified.
Protecting workers is an admirable goal, and one that should be pursued vigorously. But the treatment can’t be worse than the disease. It is not worth eliminating the gig economy, risking disruptions of up to 8.5 percent of GDP, and denying 90 percent of independent workers the flexibility and independence they currently enjoy. It would be far better for Biden to embrace the Labor Department’s new rule and vigorously enforce it, than to replace the rule with the ABC test. The latter option is simply too much for an already crippled economy.
Read the full story at Biden should keep the new commonsense independent contractor rule | TheHill