American workers are ditching traditional 9-to-5 jobs for more flexible hours, schedules, and positions. The pandemic has only accelerated this shift, especially among women. People are choosing to work as independent contractors either part-time or full-time. However, independent contracting is at risk from Congress and the Biden administration. Mike Hruby, President of New Jobs for Massachusetts, Inc., has a proposal to protect independent contracting by creating a federally-recognized classification for them. He joins us on this pop-up episode of She Thinks to explain his proposed bill, the Be My Own Boss Act. Tune in!


TRANSCRIPT

Beverly Hallberg:

Hey everyone, it’s Beverly Hallberg. Welcome to a special pop-up episode of She Thinks, your favorite podcast from the Independent Women’s Forum where we talk with women, and sometimes men, about the policy issues that impact you and the people you care about most. Enjoy.

Patrice Onwuka:

Hello and welcome to this pop-up edition of She Thinks podcast. This is Patrice Onwuka, director for the Center of Economic Opportunity at Independent Women’s Forum. Today, we’re talking about work, specifically being your own boss. How many people dream of firing their nine-to-five job and setting up their own shop? Well, increasingly, American workers are ditching traditional jobs for more flexible hours, schedules and positions. And the pandemic has only accelerated that shift especially for women who balance careers, given duties. Now, independent contractors are everyone from marketing experts to mall Santas, the florists and Uber drivers. But these workers are at risk. Congress backed by the Biden administration are on a warpath, to narrow and define who can be an independent contractor. California did this, one pass an AB5 and we saw what happened. People lost jobs and intents immediately. So how can you protect independent contractors?

Well, our guest today has an idea. Mike Hruby, is president of New Jobs for Massachusetts Incorporated, a nonprofit working to remove the legal barriers to rapid drop roof. And, he’s fighting to remove the stringent ABC tests from federal and state labor laws. AQuantive online, independent contractors for more than five years and an employer for more than 20 years, he like many entrepreneurs began his career as a W2 employee and senses, there must be a better way. Mike Hruby. We are happy to have you on today’s podcast and we look forward to hearing about this better way. So welcome.

Mike Hruby:

Thank you, Patrice. It’s nice to be here with you.

Patrice Onwuka:

Terrific. So tell us about New Jobs for Massachusetts. What is your organization and what do you do?

Mike Hruby:

New jobs for Massachusetts is a nonprofit organization and we work to remove the barriers in federal and state law to rapid job growth. And we were formed a little over 10 years ago. Early on, in the first year we were organized, we started working on the law that everybody told me about that I hadn’t heard about, which was called the Independent Contractor Law. And we have worked on it ever since. It’s our primary law as a barrier to employment. It started in Massachusetts in its current form. They copied it word-for-word in California. And now the California version is going to, according to the current administration wants, they want to insert it in federal labor law, which means it would prevail over all other laws. So our work is concentrated on undoing that so that each individual can decide for herself or himself, whether they want to be their own boss and whether they want to work and on what schedule and under what terms.

Patrice Onwuka:

Well, that sounds refreshing Mike. I mean, I think people enjoy today, this idea of being an entrepreneur and being their own boss. But before we get into how we can accomplish that, tell us, just to give us a little background on the different classifications that already exist. I mean, is everybody already an employee or how does that interact with independent contractors?

Mike Hruby:

The federal law named the Fair Labor Standards Act is the core of all national labor laws. State and federal. And it stipulates in one paragraph that everyone working is, shall be considered an employee unless they meet some tests and what they’re proposing. So then, either you’re a corporation type of person and you have employees, or you’re an individual and you have to work for somebody as an employee. So that’s the core and that there are laws, there are rules, but the States can’t get more generous than that. They can only be more strict. California went with more strict. And so that has set up the current commotion that many people have heard about, about AB5 and the PRO act.

Patrice Onwuka:

Well now for our listeners, if you’ve been listening for the past few months, we have definitely covered AB5, which, or Assembly Bill 5, which redefined what an employee versus an independent contractor in the state would be. And, and as Mike is saying, this could become federal law, thanks to the PRO act, which would among many other things, institute this more stringent definition of independent contractors. And what we’re talking about is effectively reclassifying millions, tens of millions of workers, as employees and know that the companies may not be able to afford to do that. And so you’ll probably end up with a lot of unemployed people. So Mike, how can we avoid such a fate? You have an idea, tell us about it.

Mike Hruby:

Patrice, we call the legislative solution, be my own boss. It’s a phrase that beats in almost every person’s heart, the public supports the idea. Maybe someday they’ll be their own boss or they want to be their own boss now. And so we’d spent a lot of time with the Fair Labor Standards Act, keeping in mind the needs of many different types of people. Employers, attorneys, hardworking part-time workers, full-time professionals, regular on-the-street construction workers. Tried to figure out a way that those who chose to be self-employed could somehow indicate that their choice… It’s important for them to know if you want to be able to offer them a step that they can take to control their life when they want to do it. I was pretty happy as an employee early in my career, but later I wanted to become self-employed because I saw that there were just simply better ways to spend my time.

Many people go through that bad experience. And so, what we did, first of all, in the law is we set up a simple opportunity in plain English. The law is only 456 words long, and we allowed them to make a simple choice. What they wanted to be, an employee, or be an employer in a particular field or title. So you can choose to be a nurse as an independent contractor. And then so you’d say my name is this, and I make this choice to be my own employer. Then, what we did was because you can’t walk around and say, “well, I told the department of labor that I want to be my own boss.” Oh yeah. Oh well, fine. So we established something called a self-employment identification number parallel to the federal identification number issued to all corporations on demand.

And by having this number, you create a token, Patrice, that an individual can take around and show to a prospective client. Let’s say I’m a marketer and I want to do a marketing event using people in the neighborhood to do the work. And someone says, well aren’t you going to wind up being an independent? I mean, calling me saying that I misclassified you and you can say, no, here’s my self-employment number. I’ve made the election to be self-employed in my field. And so that is, that becomes a bond of trust between the buyer of your services you the seller of your services. And that’s important because there’s all this commotion around the threat of self-employment, misclassification and all those things. So we’re trying to diffuse that damage that’s been done to the reputation that independent contractors have acquired through no fault of their own.

Patrice Onwuka:

Well, [crosstalk 00:09:14].

Mike Hruby:

Go ahead. Yes.

Patrice Onwuka:

Let me put it… Before you jump in a little further. Let me just probe you on that. That was one of my later questions. A lot of opponents, excuse me, or actually should say proponents of cracking down on independent contractors. They are saying that it is widespread. There is a lot of misclassification of, of independent contractors. They’re in essence saying tech companies, other companies are, instead of paying these employees as they should, they’re calling them independent contractors, kind of paying them, but avoiding paying the taxes, avoiding paying some of the social security taxes that go to the federal government. Do you think misclassification is widespread? And please explain a little bit more how your legislative proposal would address that.

Mike Hruby:

Well, first of all, I acknowledged that it exists. I do not believe it’s as widespread as any of its backers. You know the misclassification claimers, as widespread as people say. And I think that this bill addresses it by requiring people to state under penalty of perjury. And you’ll serve one to five if you’re convicted of perjury in federal prison. But it says you’re making it. It allows you to make a choice. And I assumed that they’ll encourage people to be responsible about making that choice. The same as if you get married.

Patrice, you make the choice to live under marital law. And we don’t deny people that choice because some marriages break up or people don’t get along, or people make unwise decisions. We say, we wish you luck, get counseling if you need it, but here’s the law and here’s what you have to do to live within it. So I believe that misclassification will mostly go away. If those who are actually voluntarily self-employed are allowed to register their choice, then there’s no temptation to get a job, take the pay, and then say, six, eight months later, “Oh, I thought you were making me of my own self.” And so you were forcing me to be self-employed. So I’m, basically as the kids books, as getting backseated, that would be done away with.

Patrice Onwuka:

Gotcha.

Mike Hruby:

So there’ll be few fewer claims.

Patrice Onwuka:

Fewer claims, that’s good. Now, I think I had interrupted. You were talking about the third thing that this law does, and I will absolutely direct people to your website to read more about the different qualifications that you’re expecting, but what is that other thing that you were going to mention?

Mike Hruby:

Oh, thank you, Patrice. It has to do very much with the, what’s happening at the moment. This bill will fortify the access that people have to self-employment by choice. There’s a big push on to make everybody a W2 employee under the sort of a utopian thought that we’ll just all lift ourselves up by our bootstraps, and everybody can make the same amount and do the same jobs. And it doesn’t allow for specialties or emergency work or anything like that, where you can make up a better arrangement for both the buyer and the seller, pay your taxes, buy the benefits you want and make arrangements to live your own life. You know, while working and doing the work you want. The PRO Act will end small business. It will end independent contracting. You can simply read the bill and see that this would go in the other direction. So this bill is very helpful if they don’t pass the PRO Act and people wisely, like you, say “well, how, how can we solve this problem?” Be my own boss is the answer to that question.

Patrice Onwuka:

Mike, you were reading my mind because my next question was going to be, what is the biggest threat that you see right now? And it sounds like you feel it’s coming from Congress, the PRO Act to the Protecting the Right to Organize Act that we’ve mentioned before. Do you think… So just remind us now and let me toss in there. We also have the Biden administration that can work through regulatory reforms. We’ve seen them already do some stuff this year, but how would your act, how would it interact with it? I mean, it would change federal law, but what about state laws? What about potential state laws, like we saw in California? Or a regulatory agency, like the department of labor? Tell us, would this be a way of stopping any of those other efforts?

Mike Hruby:

It will overcome all of those efforts, because we put a statement in this bill. It’s in the third section. And we, we acknowledged the problem that there are, for instance, multiple ways to calculate is someone an employee or an employer for social, not social security, but workman’s compensation. Other pension benefits. We say that as far, the status of the individual for employee, employee, or employee-employer, this bill prevails over all other instances in federal, state, and municipal legislation, regulation and court cases. In other words, this is the definitive bowmen, for this person is to be at the wage and hour division website and declare and sign this test of 10 things that everybody who’s self-employed can’t wait to do. I want to price my own work and set my own schedule and that’s not why you get a job with somebody else. And, you know, if you take that test, then we’re providing access to that, that ability and trying to retain it, despite all other legislation. And we’ve gotten the expert’s opinion on how to accomplish this. And they’re very pleased with it.

Patrice Onwuka:

Well that is refreshing to hear that it leaves us feeling very helpful, Mike, as we’ve been pushing very hard, like I know your group and many of the other organizations we work with. We’ve been pushing back to educate the public on how the PRO Act, what it would do. And obviously, as you rightly said, pushing everyone to be employees, nine-to-five workers, removing that flexibility, that women especially depend on, need people with disabilities. People with health conditions that cannot work in a traditional job needs. It would remove all of that flexibility, remove that ability to make those decisions for yourself. And frankly, it is government putting its sum the scale of one type of work over another. The government should not be doing that. So folks,

Mike Hruby:

I agree completely Patrice.

Patrice Onwuka:

Thank you, Mike, be my own boss is your proposal. Your legislative proposal. I encourage people to read it. Mike, what is your takeaway message to our audience?

Mike Hruby:

I think they should be very alert to the fact that there are almost 60 million self-employed people in this country full-time or part-time, and that if they all stand up for their right to be self-employed, by their choice, and each help each other right to their right. Call, email their members of Congress and their senators and express their concern, their weight will carry the day because everybody in Congress wants to be elected to Congress in 2022. And if they hear from us, they’ll be considering our case very carefully.

Patrice Onwuka:

Mike, you spoke that so well. So folks, thank you for listening to this pop-up session. Mike, thank you for joining us today to talk about the Be My Own Boss Act.

Mike Hruby:

Thank you Patrice for this opportunity to talk about it.

Patrice Onwuka:

Terrific. Well, thank you again for joining us for this pop-up episode of She Thinks. To learn more about Be My Own Boss Act, visit newmassjobs.com. We’ll have plenty of resources about the legislation and an opportunity to make your thoughts heard. Also, we have posted on our website @iwf.org, a blog post that talks a little bit about this act it’s called Congress may let me quote, be my own boss. So visit our website at iwf.org as well. Thanks again for listening to this edition of She Thinks, and whether you think to the contrary or not, we would love to hear your opinion. All right. Have a good day.