Labor Secretary Walsh’s Threat to Independent Contractors Will Harm Working Families and Small Businesses

Submitted by bdrouant on Wednesday, May 12th, 2021, 12,46 PM

The COVID-19 Pandemic has taken a sledgehammer to the American economy. This past Friday, the Bureau of Labor Statistics reported that last month only 266,000 jobs were created, falling over 86% below some estimations of a 2,000,000-plus increase in job growth.

The last thing that the government should do is threaten work opportunities for millions of American working families. But that’s exactly what Biden’s Labor Secretary Marty Walsh is doing with his attempts to force Americans into an employer-employee relationship with a boss. Walsh hid his aggressive support of forced worker reclassification during his Senate confirmation hearing. 

Flexible work arrangements are vital for hard working households which must accommodate school schedules and the caretaking of family members. Americans are increasingly finding such opportunities through freelance work. Particularly after the pandemic 58% of individuals who started remote work as freelancers are thinking about continuing that career. Biden’s DOL wants to dictate this choice to Americans by eliminating the freedom to work as a freelancer or independent contractor.

The Biden administration wants to impose nationwide the California “ABC” test designed to force companies to hire freelancers under a W-2 classification. Businesses refused to hire and chose to fire Californian freelancers. Independent contractors realize the threat of this law, as over 60% of independent contractors anticipate losing 76% or more of their business if they had to be hired as employees instead.

Any theory predicting a complete migration of work from freelance to employee status has already proven to be mythical. Instead of a migration, we will see an elimination of work opportunities. We cannot afford to rip the opportunities of the unemployed away when they need a flexible source of income.

As small businesses with only a couple of employees frequently work with independent contractors, limiting this classification will destroy small businesses. To add to any personal financial struggles, 74% of small business owners have taken on debt to stay afloat during the pandemic.

That’s why small businesses fear the prospect of a national ABC test. 45% of small businesses say they will be put out of business without the ability to work with independent contractors. They also recognize the necessity of independent contractors in this moment, as 73% of small business owners believe that freelancers are necessary for surviving the COVID-19 economic crisis.

A tragic number of small businesses have closed during the pandemic. Owners should not have to dismantle their business to meet the whims of the DOL chief.

Nationalizing the ABC Standard will be a death blow to a fragile economy.

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