The House of Representatives just passed the Protecting the Right to Organize Act (PRO ACT), by a vote of 225-206. The bill will now make its way to the Senate, where its path to victory is expected to be met with resistance—and for good reason.
The legislation would do several things—among them, it would change the existing National Labor Relations Act’s definition of what constitutes an “employee,” potentially impacting the 10.6 million people who earn their living as independent contractors.
This aspect of the PRO Act is modeled after California’s Assembly Bill 5, legislation that uses the strict ABC test to reclassify contract workers as traditional employees, putting at risk the independence and flexibility valued by contractors.
Those championing the bill will tell you this is a step in the right direction for worker rights. But AB 5 has been disastrous for freelancers in California, stripping many of their income at a time of great economic uncertainty, and a large number of these workers happen to be women.
More and more, women are seeking work as independent contractors. According to research conducted by the Internal Revenue Service (IRS), women are driving 55% of the dramatic expansion in this burgeoning sector.
While there are most likely numerous reasons for this, flexibility seems to be among the top priorities for female workers as upward of 75 percent of caregivers in the United States are women.
Whether they have chosen to become mothers or have been put in situations where they must tend to sick parents or other relatives, freelance work has empowered these women to build their careers and earn a living by giving them the flexibility to set their own hours and work remotely at their convenience.
The PRO Act would permit freelancers to organize into unions and collectively bargain. Collective bargaining is not necessarily a negative thing. But allowing contractors to unionize could mean that fewer people are hired, and some will lose the individual flexibility and control of freelancing due to collective bargaining. This might also lead employers to stop working with contractors because it could make the decision to hire them on or provide other benefits exorbitantly expensive. This will leave females with fewer options to build successful careers and provide for their livelihoods.
Not all women freelancers are caretakers, however; some just prefer to be their own boss instead of being beholden to someone else. The 2019 State of Women-Owned Business Report found that women are responsible for starting an average of 1,817 new businesses per day.
This data suggests that contrary to what many labor activists have claimed, females prefer the freedom to pursue their own ends over employer-provided benefits or paid vacation time.
In fact, the Independent Women’s Forum (IWF) found that flexibility was the main motivator for selecting freelance work over traditional office jobs for 94 percent of female contractors.
Politicians should not underestimate the importance of choice. When a woman chooses to work for herself, she is not being forced to sacrifice vital employer-provided benefits, but rather, she is demonstrating that she prefers the benefits of flexibility.
Many women also have personal circumstances that make working from an office difficult. Chronic health issues, mental health issues—like PTSD or severe panic disorder—make traditional office environments difficult to endure for these women. Without access to contract work, many would find themselves without a steady stream of income or experiencing a severe decline in mental stability.
While these are very serious issues, it is important to remember that some women simply have no desire to work traditional jobs. And that choice should not be taken away from them either.
Lisa Rothstein has spent most of her career in marketing and advertising, working as a creative director for well-known corporations like Hanes and IBM.
After living abroad in Europe for several years, she decided to come back to the U.S. in 2005. By the time she had returned, she had been out of the traditional U.S. job market for years and was now 40. As Lisa told IWF, “That’s basically a dinosaur in advertising.”
While she looked for something permanent, independent contracting work allowed her to provide for herself.
Without really meaning to, Lisa never returned to a typical 9-to-5 job and, instead, began contracting for big businesses and other freelancers full time.
Transitioning into her new role came naturally to her. While other Californians spent hours in rush-hour traffic driving to and from their offices, Lisa’s ability to work from home saved her a great deal of time, and time, as they say, is money.
Lisa recalls thinking to herself, “This is great. I get to work where I want, when I want. Making the same amount of money or more.”
Not bound by the confines of one particular profession, freelance work allowed her to build skills in a variety of fields. Over the years, Lisa has worked as a copywriter, an advisor, and a cartoonist, just to name a few of the many professional hats she has donned.
But that was before AB 5 was passed.
Because the California law requires those who meet the very broad standards set forth in the ABC test to be hired on as employees, instead of contractors, many employers are now in a tight spot.
Unable to afford hiring these freelancers as employees and not wanting to leave themselves open to penalties, many businesses have just stopped using contractors altogether.
On the other side of things, contractors like Lisa are scared to put their clients at risk for overzealous penalties, especially because many businesses are unclear as to when they are actually violating the new law. No longer able to work with certain agencies, a large part of her income has been taken from her.
“I’ve turned down thousands of dollars of work because I don’t want to get people in trouble.”
Lisa’s story is just one of many.
Many people dream of turning their artistic pursuits into their full-time career. But Kristin Genis-Lund has been fortunate to earn a living as a professional singer—or at least she was until AB 5 went into effect.
Many performers, like Kristin, are independent contractors and not traditional employees. For Kristin, this allows her to work for several different opera companies in California.
As she explained to IWF:
“Most classical musicians rely on multiple sources of income to make a living with this art form. In addition, students and freelancers rely upon the freedom to be able to every now and again pick up some cash via short-term contracts—they don’t want to be employees.”
Kristin makes an important point many legislatures and alleged labor activists are missing. Contract work is a choice. Yet, many politicians, including President Joe Biden, have the audacity to try to take away this choice and proclaim that they know what each individual worker needs.
This “lawmakers know best” mindset misses the big picture, which shows that freelance and independent workers have chosen work as contractors because it offers benefits that traditional employment does not.
The self-proclaimed labor activists pushing for the PRO Act claim to be in this fight to protect the American worker from exploitation. Every worker deserves benefits—paid time off, salary, and health care—we are repeatedly told.
But those who prefer freelance work are not being denied essential employer-provided benefits; they are trading them for benefits that are more conducive to their personalized lifestyles. Having the flexibility to work from home, set their own hours, and work in a variety of sectors often means more to people than securing paid time off or other employee benefits.
While those supporting the bill may most certainly be well-intentioned, declaring that Congress knows more about what individuals want than the individuals themselves is not only a bold display of hubris, it will harm the millions of Americans who rely on contract work for their livelihood.
Lisa, who has never been very active in politics, commented, “It’s not your [lawmakers’] choice what is a good job or what isn’t a good job.”
We are already seeing the fallout from AB 5 happen in real time in California, and women are being disproportionally impacted by its implementation.
Albert Einstein has been widely credited with the quote, “Insanity is doing the same thing over and over and expecting different results.”
By this standard, those legislators who recognize what is happening in California and continue to push for the inclusion of the ABC test within the PRO Act might want to take a hard look at what they are doing.
AB 5 is failing Californians at a time when the pandemic has made many financially vulnerable. To implement this legislation on a national front would have unknown implications. It also opens the door for more consequential labor laws to be rewritten to include the ABC test. Already, this legislation is the most significant labor bill since the 1935 National Labor Relations Act.