Capitol Building by Andrew Malone is licensed under CC BY 2.0.
The House Committee on Education and the Workforce has passed a new Congressional Review Act (CRA) resolution, authored by Congressman Kevin Kiley (R-Calif.), which would repeal a Department of Labor (DOL) final rule that jeopardizes the livelihood of 27 million independent contractors. This effort is joined by Senator Bill Cassidy (R-La.), who has also introduced a CRA resolution for the independent contractor rule in the Senate.
By forcing the new DOL regulation on a thriving U.S. gig economy, the Biden administration aims to make it more difficult for Americans to self-classify as freelancers. Luckily, Republicans have been listening to a vast coalition of independent contractors, many of whom cherish their ability to pursue multiple sources of income and scoff at the restrictiveness of W-2 status.
“Independent contractors want to be their own boss. But Biden and the Democrats want to force them to HAVE a boss,” said Grover Norquist, President of Americans for Tax Reform.
Americans for Tax Reform applauds the House Education & Workforce Committee majority for passing Congressman Kiley’s resolution to nullify the Biden DOL’s harmful reclassification of independent contractors.
In January, the Biden DOL introduced a six-factor test for determining employment status under the Fair Labor Standards Act (FLSA). This final rule replaced a Trump-era definition for independent contracting, which offered more opportunities for Americans seeking flexible work arrangements. But rather than stopping at six factors, the DOL will now employ a “totality-of-the-circumstances” economic reality test, which considers a non-exhaustive list of factors that “in some way indicate whether the worker is in business for themself.” While the DOL may analyze core factors such as the opportunity for profit or loss and the degree of control, the open-ended nature of this rule gives regulators the authority to invalidate freelance work at their sole discretion. Without a concrete definition for independent contracting, the Biden administration is free to move the goalposts whenever it pleases, barring countless Americans from valuable streams of income.
On the contrary, Republicans have been vigorously working to defend independent contractors.
Sen. Cassidy has abhorred the actions of the DOL, arguing that the Biden administration should not “forcibly and coercively unionize workers”, but rather “increase individual freedom and opportunity.” Rep. Kiley has struck a similar tone, stating that “Washington should support workers, not regulate them into oblivion.” Their efforts have been met with high praise from fellow conservatives, with House Education & Workforce Committee Chairwoman Virginia Foxx (R-N.C.) echoing a sentiment that Americans are “fed up with the Department of Labor continually breathing down their necks.”
Republicans have also expressed distaste with the obvious similarities between the recent DOL ruling and California’s AB 5 law, which established a notoriously restrictive ABC test for freelance employment status. This resemblance should not come as a surprise. Prior to languishing in confirmation limbo, Acting Secretary of Labor Julie Su implemented this failed policy while serving as California’s labor secretary. Rep. Kiley has alleged that this DOL ruling is “modeled after the same job-killing AB 5 that will cost millions of independent professionals across the country their livelihoods.” Sen. Cassidy has wholeheartedly agreed, warning that “the experience of independent contractors in California is illustrative of what can happen at the federal level.”
The business community has also made clear that the Biden administration’s final rule would spell disaster for the economy. For example, Marc Freedman, vice president of workplace policy for the U.S. Chamber of Commerce has decried the DOL final rule, which could result in “lost earnings opportunities for millions of Americans” and “significant negative impacts on our economy.” Similarly, officials from the National Retail Federation and the National Federation of Independent Business have voiced opposition, predicting explosions in accidental misclassification for workers. By repealing the DOL’s new restrictive rules for independent contracting, Congress can restore vital autonomy to the American workforce and strengthen economic stability for millions of families.
When considering whether to repeal this DOL final rule, lawmakers should remind themselves of the millions of Americans who cherish their right to work without having a boss. By returning to a common-sense standard for independent contracting, workers will once again be free to pursue income on their own terms. Americans for Tax Reform applauds the efforts by Rep. Kiley and Sen. Cassidy to revitalize independent work, ensuring that DOL regulators are prohibited from sandbagging the enterprise of American workers.
Members of Congress should support H.J. Res. 116 and S.J. Res. 63, the CRA resolutions to halt Biden’s crackdown on independent contractors, when they come for a floor vote.