The new rule acts from the premise that independent contractors have no right to determine whether they are independent or an employee. It is the DOL's job to do that for you. Really???
by Jennifer Oliver O'Connell, Redstate.com, January 16, 2024
While you were distracted by all things Iowa the Biden administration is eroding small businesses and snatching away the livelihoods of independent contractors through bureaucratic fiat. The Acting Secretary of Labor, Julie Su, quietly dropped a revised Independent Contractor Rule on January 9, and it's as bad as expected. California Rep. Kevin Kiley (R), who has been at the forefront of this war against independent professionals since his time as an Assemblyman, rendered the bad news ahead of the Department of Labor announcement.
Here are some of the reviews AB 5 received in California:
-Newsom’s own former deputy chief of staff Yoshar Ali called it "one of the most destructive pieces of legislation in the past 20 years," adding, "It’s truly horrific how many people are negatively impacted by it."
-Former State Assembly Speaker and San Francisco Mayor Willie Brown said the law made him want to "picket" against the "bastards" at the Capitol and the special interests that "took advantage" of them. -Andrew Cuomo rejected a similar law in New York, saying he didn’t want to "make the same mistake" as California.
-The Daily Kos warned other states, "Don’t make the mistake California’s Gavin Newsom did," with the site’s founder calling the law "disastrous" and "asinine" and its supporters "shameful."
-The head of the California NAACP assailed AB 5 as a "terrible law" and a "gut punch to our community."
-The CEO of the Black Chamber of Commerce called it a "catastrophe" responsible for "enabling, defending, and propagating systemic racism."
-Two hundred Ph.D. economists reported the law is "doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them."
Yet Biden campaigned on a promise of imposing a new federal standard "modeled" on California's AB 5. He has now done just that, and has even elevated the architect of AB 5, Julie Su, to carry out this attack on the right to earn a living as ruthlessly as possible.
Since 2022, there are 57.3 million Americans who consider themselves freelancers, independent contractors, self-employed, or entrepreneurs. The legacy media's tendency to lump all of these categories under the "gig" economy simply frames it in people's minds as technology or rideshare; but these are your dental hygienist, your child's soccer coach, fabricators, farriers, and home health care providers, to name just a few. Over 600 professions have been identified that would be upended or outright eliminated when this DOL IC Rule takes effect.
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The Independent Contractor Rule was recorded in the federal register on January 10, 2024, and is scheduled to take effect on March 10, 2024. It is 339 pages of essentially the Department of Labor justifying why independent contractors should not be allowed to exist. The rule acts from the premise that independent contractors have no right to determine whether they are independent or an employee. It is the DOL's job to do that for you.
The Biden administration has used court precedent to expand on these, creating six overarching factors in a “totality of the circumstances” which will be analyzed to determine, as a matter of economic reality, whether professionals are dependent on the potential employer for work or in business for themselves.
The term "economic reality" appears 345 times within the Rule as one of the means to deny an independent contractor their right to earn money as they choose. It's positively chilling, and if Americans refused to pay attention when California independent professionals raised the alarm on AB5, then they very well need to pay attention now.
The new rule is so poorly designed, there’s no telling exactly how many workers will be hurt. But the damage will be more widespread than the Biden administration cares to admit. Many enterprising Americans who want to make more money will find it much harder. Many moms who want to schedule their work around their young children will find they can’t. Many dads who became truckers — in an industry that has used independent contracting since the dawn of interstate trucking — will find their careers thrown into chaos. And on and on the list of victims grows.
In the Biden administration, it’s acceptable to sacrifice workers if it strengthens labor unions. In the short run, workers should hope that Congress passes Senator Bill Cassidy’s Congressional Review Act bill — which he announced on January 9 — to block this rule. But long term, workers need the Employee Rights Act, which would restore a simple, clear, and unalterable definition of independent contracting.
