"Department of Labor" by NCinDC on Flickr is licensed under CC BY-ND 2.0: https://bit.ly/3X8ue4B

This week, the Washington Times published an op-ed by ATR Federal Affairs Coordinator Rowan Saydlowski which discusses threats to the financial services industry posed by a proposed Department of Labor (DOL) rule on independent contracting.

The piece begins by explaining the current state of the proposed DOL rulemaking:

In late 2022, President Biden proposed a restriction of workers’ ability to classify themselves as independent contractors and force them to be W-2 employees instead. The executive branch proposal came only after repeated failures by Democrats to pass similar worker reclassifications through Congress as part of a pro-union package known as the Protecting the Right to Organize Act. The rule would constrict the definition of an independent contractor based on a series of vague factors constructed specifically to end independent work for millions of Americans, placing them into the grasp of union bosses.

The op-ed then outlines the importance of maintaining the freedom to work as an independent contractor in the financial services sector:

More than half a million independent contractors work in the U.S. finance and insurance industry, including nearly 160,000 independent financial advisers. Like independent contractors in other industries, a large number of those in the financial services industry cite scheduling flexibility and the ability to be one’s own boss as their main reason for choosing to work as an independent contractor.

These workers also report economic benefits from their right to work independently. Independent contractors who work in financial services are more than twice as likely as those in other industries to cite higher compensation as their main reason for choosing independent classification status.

The piece also highlights the downstream benefits of independent contracting for financial services firms and their customers:

At the same time, financial services companies that work with independent contractors see economic benefits of their own, often enjoying lower costs than they would face with an all-employee workforce and a compensation framework that is more closely tied to worker performance. These benefits pass through to customers, who receive higher-quality services at lower prices due to the independent contracting model. As a result, lower-income Americans can have greater access to financial advice and other important financial services to help secure their economic future.

As emphasized in the op-ed, these benefits are all threatened by the Biden administration’s proposed rule. Worse yet, according to a study commissioned by Americans for Tax Reform and the Tholos Foundation, a vast number of independent contractors who are forced to reclassify under the rule would be further burdened by higher taxes.

The op-ed concludes by warning of further threats to independent workers posed by President Biden’s nominee for Secretary of Labor:

Workers today are in a precarious position. Mr. Biden’s nominee for secretary of labor, Julie Su, was the chief architect of California’s disastrous reclassification effort that inspired the current Labor Department proposal. If Ms. Su is confirmed as secretary and allowed to enforce her agenda at the department, she will pose a serious threat to the livelihoods of independent contractors in the financial services industry and the millions of Americans they serve.

Click here to read the full op-ed.