Bill of the Month — October 2023: Modern Worker Empowerment Act

The Taxpayers Protection Alliance’s Bill of the Month for October 2023 is H.R. 5513/S. 3018, a bill to amend the Fair Labor Standards Act of 1938 and the National Labor Relations Act to clarify the standard for determining whether an individual is an employee, and for other purpose, introduced by Reps. Elise Stefanik (R-N.Y.), Kevin Kiley (R-Calif.), and Michelle Steel (R-Calif.), alongside Sens. Tim Scott (R-S.C.), Marsha Blackburn (R-Tenn.), Kevin Cramer (R-N.D.), Cindy Hyde-Smith (R-Miss.), Mike Braun (R-Ind.), Roger Wicker (R-Miss.), and John Thune (R-S.D.). This legislation would safeguard independent workers’ right to work freely as contractors rather than employees.

Background:

The Biden administration has aggressively worked to force employers to reclassify their independent contractors as employees. This raises costs for the business and reduces flexibility and opportunity for the worker. These efforts have been led by Acting Secretary of Labor Julie Su, who, while serving previously as California’s labor secretary, was instrumental in enforcing the same sort of restrictions.

Biden’s Department of Labor (DOL) in 2022 published a Notice of Proposed Rulemaking that advanced a complex and multi-factor test to determine whether a worker can be classified as an “independent” worker. While the agency acknowledged that it couldn’t enforce California’s incredibly strict standards (often called the “ABC test”), its rulemaking is nonetheless in the same vein and would in effect transition many independent contractors to employee status. When businesses are forced to classify their workers as employees, they find themselves burdened by many additional costs, which has led to layoffs.

Surveys demonstrate that most independent contractors prefer their chosen mode of work to traditional employment. With 40 percent of the American workforce engaged in independent work, this belief is held by many. A large majority of those polled cite income opportunities and schedule flexibility as driving factors in choosing to be independent contractors. There are claims that independent contractors don’t have healthcare and any effort to protect employee status is to protect that benefit. However, despite widespread misconceptions, the data suggest that the vast majority of independent workers do have health insurance.

The Modern Worker Empowerment Act

The Biden administration’s commitment to cracking down on independent workers’ right to earn a living in their chosen occupation requires congressional action. The Modern Worker Empowerment Act effectively would reinstate a far-better Trump-era standard. In the modern (and increasingly digital) economy, flexibility is of paramount importance for workers. Reducing this flexibility will only prevent hard-working Americans from realizing the American Dream. Policies like the DOL’s proposals and California’s infamous A.B. 5 harm not just app-based rideshare drivers and food delivery workers, but many artists, journalists, high-skill knowledge workers, and others. Since its introduction, this legislation has been assigned to the House Committee on Education and the Workforce, and the Senate Committee on Health, Education, Labor, and Pensions, where it awaits further review.

It is for these reasons, among others, that TPA is pleased to make the Modern Worker Empowerment Act, introduced by Reps. Elise Stefanik (R-N.Y.), Kevin Kiley (R-Calif.), and Michelle Steel (R-Calif.), alongside Sens. Tim Scott (R-S.C.), Marsha Blackburn (R-Tenn.), Kevin Cramer (R-N.D.), Cindy Hyde-Smith (R-Miss.), Mike Braun (R-Ind.), Roger Wicker (R-Miss.), and John Thune (R-S.D.), its Bill of the Month for October 2023.