The Story Economy Blog

If You Are an Independent Contractor, You Need to Read This


This will be the most public service announcement blog post I’ve ever written.

There’s a reason why.

My livelihood as an independent contractor—a small business owner, to be exact—is threatened. And if you are an independent contractor (and like being one) your livelihood is threatened, too.

This is all because of a piece of legislation that recently passed the House and may be headed soon to the Senate called The PRO Act.

The PRO Act strengthens employees’ rights to unionize. I have always supported this and still do. The problem is the way the bill defines an employee, for the purposes of unionizing. It uses something called the ABC test.

The “A” prong says that to be considered an independent contractor, you must be free from control and direction. The “C” prong essentially says that you’re working in your established trade.

Fine. I’ve got those things covered. Any true independent professional should.

But the “B” prong of the ABC test states that the service you’re providing must be “outside the usual course of the business of the employer.”

This is highly troubling for professional independent contractors.

A writer such as myself could be said to fail the B prong when I write for a publication or media agency, because we’re in the same course of business. Same for an illustrator, graphic designer, or photographer. A music, pet, art or other kind of therapist fails it if they contract with a healthcare company. A musician fails it if they contract with a band or local theater. Tutors, truck drivers, accountants, real estate agents, cosmetologists, sports referees, insurance agents . . .

The B-to-B examples go and on.

Which is the point, because the architects of this bill want as many people as possible to be classified as employees, so that more people can unionize. It envisions a massive group of independent business owners being able to unionize, while somehow—mysteriously!—remaining independent contractors, and not actually being employees.

Except they really are.

If it sounds nonsensical, that’s because it is.

So . . . the reality is, some people are misclassified as independent contractors and really should be employees. Or they are perma-lancers with a full-time job always dangled in front of them but never offered. This is a shitty thing that shouldn’t happen.

But there is already an IRS test that should catch many of these misclassifications.

As a freelance writer, I can pass the IRS test, because it’s a more nuanced, holistic look at the contractor and the work.

But I can’t pass the standard the PRO Act wants, because the ABC test can’t tell the difference between someone who is truly exploited . . . and me: an independent professional who files my taxes as an S-corporation, pays payroll tax, and freely chooses who I work with, when I work, and what I will charge them or if I will accept the rate they offer.

The ABC test is a bad test and has no place in any federal legislation. It may allow Uber and Lyft drivers to unionize (the ultimate goal of this bill), but it could also potentially squash millions and millions of other people. Because when you say someone is an employee according to the National Labor Relations Act (NLRA), but “only” for the purpose of unionizing—they’re not really an employee—it creates chaos and confusion for companies that contract with them.

Not to mention, how would groups of independent contractors doing vastly different things for vastly different sets of clients and charging vastly different rates even unionize? And why would they want to? The whole point of being independent is that you’re independent. When a client treats you like crap, you fire them and find a better opportunity.

And no, despite what the unions say about how great it would be if all independent contractors had the right to unionize, the reality for most freelancers isn’t remotely like the Writer’s Guilds (for screenwriters), where the writers are all doing very similar work and for a rather limited number of companies. We’re talking hundreds of different professions, all with their own standards and quirks.

Ultimately, it will be easier for companies to just not work with freelancers. Or shut programs down that rely on them. Or use non-U.S. contractors. Or employ freelancers as part-time W2 employees—offering exactly zero benefits, and making them lose flexibility (“control and direction”), copyright to work they produce, and the ability to deduct business expenses. It will hit women hardest, because women tend to need the flexibility of freelancing. So do people with disabilities and parents of children with disabilities.

My colleague, Erik Sherman, talked to legal and labor experts, and he explains how no one knows what the effect of the ABC test inside the PRO Act will be in this piece he wrote for Forbes.

Writer Larry Buhl also lays out the problem in this piece he wrote for Business Insider.

I should mention I also wrote a piece for NBCNews about the PRO Act. It’s about my frustration with my own party—the Democrats—because they are the ones pushing the ABC test. Joe Biden campaigned on it and specifically called it out in his labor platform, writing, “The ABC test will mean many more workers will get the legal protections and benefits they rightfully should receive.”

I don’t agree with the black and white thinking of that statement. But he supported everything else I believed in, so it was never a choice. No part of me regrets voting Democrat or being a Democrat. I’m not a one-issue voter and I think it’s your duty to hold your own party accountable and let them know exactly how you feel when their ideas are misguided.

Some Democratic legislators are beginning to listen, even as unions are trying as hard as they can to control the conversation and make people like me the enemy.

I’m so not the enemy. Framing this as a conservative vs. progressive issue is highly inaccurate . . . and just plain gross. You can be pro-worker (I am), pro-the right for employees to unionize (I am), and against the ABC test because it’s the wrong solution to worker exploitation. Instead of writing a bill that helps everyone get what they need, the ABC test uses nonsense logic and blunt force, and totally gaslights independent contractors—79% of whom say they want to remain independent, according to the Bureau of Labor Statistics.

But sure. Call me—a solid blue voter who has always supported unions—a scab. That solves a lot.

So, if you are still reading this Very Long Public Service Announcement, I suggest you get on the phone with your senators, especially the Democrat ones. (I’m having a full-on relationship with Sherrod Brown’s voice mail.) It doesn’t hurt to call your House reps too, because if it doesn’t pass the Senate, it may come back to the House again.

(Oh, and I didn’t even mention AB5 in California last year, because I would need 2,500 more words. It was legislation aimed at making Uber & Lyft drivers employees, and it used the ABC test to do so [though it’s not the same bill as the PRO Act]. AB5 was a disaster, and left freelancers struggling. Eventually a clean-up bill passed that exempted more than 150 professions, and Uber & Lyft became exempted anyway because they spent millions of dollars to pass Prop 22. Feel free to read up on that shit show.)

I HATE scaremongering. I’m sorry to do it. But it feels like hardly anyone is paying attention to this tiny little ABC clause in the PRO Act, and it has the ability to cause mass confusion, greatly harm the economy, and put the livelihood of millions of independent contractors at risk—with absolutely no upside to employees who actually want the protections of unions.

Call your senators. Write letters. Tell every independent contractor you know. Join us at the bipartisan group, Fight for Freelance USA, where we are focused solely on getting the ABC test out of the PRO Act, and any other national legislation (yes, there are others, like the Worker Flexibility and Small Business Protection Act, the most insulting name possible, and it’s also scary as shit if you read it). 

[Photo credit: Sigmund on Unsplash]


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