The entrepreneurial spirit of America is at risk. Flexible work opportunities are on the line.
A new federal labor rule will restrict independent contracting nationwide beginning on Monday, March 11th, when the Biden Department of Labor’s independent contractor rule takes effect.
The rule adopts a more restrictive standard to determine who can be classified as an independent contractor. Millions of Americans stand to be reclassified as employees whether they want to be or whether companies can afford to hire them. The Biden administration claims this will add an additional layer of protection for workers.
The reality couldn’t be further from the truth. We must act now to stop the harm to people.
This rule will have a disproportionate impact on women who are self-employed, freelancers, gig workers or who have side hustles. In the past year alone, 64 million Americans freelanced, half of whom were women.
Women choose independent contractor status because of the flexibility it affords them. They can work when, where, and how they choose as they balance other priorities such as raising children, caregiving for parents or managing their own health conditions. From florists to musicians and writers to health professionals, many women may no longer be able to depend on flexible independent work to make extra income or support their families.
We must stand up for America’s independent contractors.
When California implemented similar restrictions through the law AB5, the results were devastating. Independent contractors lost incomes, contracts, and livelihoods. Self-employment plummeted 10.5% in California after AB5 was enacted in 2020 and overall employment dropped 4.4%. The new DOL rule would spread this hardship nationwide.
While legal challenges work through the courts, Congress is working to overturn this flexibility-killing rule.
Yesterday, workforce champions in the House and Senate introduced a Congressional Review Act resolution to undo this rule. Congress can stand up for the hard working who just want to work on their own terms.
