Square Gigs, Round Economy

Our legislative affairs correspondent in the Outer Banks weighs in meatily. And since he's subcontracted posting to me because he claims that he's just a simple caveman blogger and doesn't understand this newfangled technology, I believe this post is relevant to my employment status.

A piece of legislation working its way through Congress applies to few of you and is by no means a cinch to pass, so of course I’ll bore you with details.

H.R. 842, the Preserving the Right to Organize (PRO) Act, is labor legislation that aims to bolster the rights of workers to negotiate for higher wages, increased benefits and safer work environments. It was introduced by Rep. Bobby Scott (D-Va.), chair of the Labor and Education Committee and a liberal presence in the House of Representatives for almost 30 years, with beaucoup Dem co-signers.

Hard out here for a pimp in the jig economy

The PRO Act debate lines up predictably on many fronts. Many left-leaning advocates argue that worker rights and benefits have eroded, particularly during the pandemic. They say that workers must be able to organize and unionize without retribution, and that companies should be held accountable for monkeying with those efforts. Conservative critics gripe about union over-reach, added cost to businesses, right-to-work legislation already on the books, and onerous government control.

Except it’s not quite that simple. Among those who could be hurt by the PRO Act are segments of the self-employed, retirees and semi-retirees who do consulting work, freelance writers (raising my hand), and part-time workers. In short, independent contractors who arrange work with various employers. If certain criteria aren’t met, companies could not classify someone as a contract worker and would be required to hire them full-time to comply with the law. In some cases, companies would opt out and work opportunities would simply evaporate. In others, workers would opt out, rather than subject themselves to the constraints of full-time employment.

Austen Bannen, a senior policy analyst for the conservative, Koch brothers-founded Americans for Prosperity, wrote that the PRO Act “would hurt both employers and employees by putting numerous government roadblocks to the flexible work arrangements both are seeking. Instead of being able to work your own way as an independent contractor, the PRO Act could lead to both government and unions dictating the terms of your employment.”

I’m forever skeptical when pro-business mouthpieces yammer about what’s best for workers, since many corporations regard workers as furniture with a pulse. But in this case, there’s at least a kernel of truth. Whether by force or by choice, the gig economy is upon us and expanding.

The PRO Act would introduce a three-prong, ABC test to determine if someone should be classified as an employee and not an independent contractor. According to language within the draft of the bill: “An individual performing any service shall be considered an employee and not an independent contractor, unless,

A) “The individual is free from control and direction in connection with the performance of the service, both under contract for the performance of service and fact;

B) “The service is performed outside the usual course of the business of the employer;

C) “The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.

An independent consultant might pass B) and C), but flunk A) if an employer dictates terms of service. A freelance writer might pass C), but flunk A) and certainly flunk B), since articles are part of the “usual course of business” for publications.

A similar bill passed the House of Representatives last year, but died because the Republican-controlled Senate refused to take it up. Now, with a 50-50 Senate split and VP Harris holding the tiebreaker vote, many think the current bill will at least get a hearing. Several conservative Dems and those whose constituents are less than thrilled with the bill could decide its fate and take Harris out of the equation.

The PRO Act is comparable to one that went into effect in California in 2020. Assembly Bill 5 (AB5), the so-called “gig worker bill,” required companies that use independent contractors to re-classify them as employees, with some exceptions. It was aimed at companies that hire a lot of independent workers, such as Uber, Lyft and DoorDash. However, it also swept up still and video photographers, editors, freelance writers, content contributors and artists.

Griping grew so loud that California amended the bill – twice. One piece of legislation created exemptions for many workers, such as writers and artists. A ballot initiative allowed app-based drivers to remain independent contractors. 

Near as I can tell, most of you have traditional work. Company structure. Set schedule. Salary. Benefits. But as businesses consolidate or downsize staff, more people are thrown out of work and find themselves part of the gig economy. As many of you approach your seventh decade, you may choose to hop off the hamster wheel and peddle your knowledge and expertise part-time or as a freelancer, because you prefer the flexibility or because companies increasingly lean that direction in employment practices.

No telling what the PRO Act will look like after Congresscritters start slicing and dicing. Certainly, workers deserve protection and fair wages (hello, meat packers and supply chainers in a pandemic). But one-size-fits-all legislation that caters to unions in an evolving economy appears unwise. Babies and bath water, and all that.