The Department of Labor (DOL) has proposed new restrictions on independent contracting that will hit independent workers across the country. They seek to require more workers who currently contract with businesses to instead become traditional employees. These rules are similar to what was put in place in California in 2020, a law known as AB5, to devastating effect.
The problem that California and now the DOL supposedly want to solve is that a growing number of workers — more than 64 million — work as independent contractors, and many of them are forgoing traditional employment opportunities entirely. As contractors, these workers don’t receive the same employment protections and benefits as employees, but they have more freedom to structure their work life: they decide the terms of their work, including hours and schedule.
Patrick Turnbull is a perfect example of a casualty of the war on independent contracting in California. Patrick was a seasonal independent contractor who appeared as Santa Claus each holiday season for 20 years. His opportunity to work was slashed when AB5 went into effect.
Businesses that would normally hire Patrick to entertain children and families couldn’t be sure if they would be breaking the law to engage him for the few weeks around the holiday season. This created a hardship for Patrick, who lost that seasonal income, but it was also a loss for the community. Why are we trying to regulate away the opportunity for families to take pictures of joyful young children sitting on Santa’s lap — and senior citizens the opportunity to bring them that joy?
Regulators want businesses to simply hire their independent contractors as traditional W-2 workers. But just as this relationship is unworkable for many contractors, it’s equally untenable for businesses. Many simply cannot afford to turn contractors into employees and don’t need them in these roles consistently throughout the year.
Santas are just one small example of workers in the crosshairs of these regulations.
I run a women’s group that employs about 35 workers but also engages dozens of women to write and provide other services on a contract basis. We can’t afford to bring all those women on full time. Moreover, many of these women have taken time out of the workforce to care for kids and want opportunities like this to use their skills and stay engaged to make it easier to transition back once they want to resume full-time employment.
Advocates for cracking down on independent contractors paint them as victims of corporations that don’t want to provide benefits and instead abuse less expensive contract employees. Yet surveys show that independent contractors overwhelmingly prefer their flexibility and freedom and don’t want to be employees.
In fact, many need that flexibility to be able to work at all: a 2021 survey found that “55% of freelancers and 59% of skilled remote freelancers indicate that because of personal circumstances, they would be unable to work for a traditional employer.”
Women caring for children, people with disabilities or health issues, students, or the elderly are all groups that frequently find traditional employment opportunities unworkable.
Without the ability to work independently, many current independent contractors simply won’t be able to work at all.
The DOL’s proposed rules put opportunities like this in jeopardy. They will destroy the dynamic labor economy that has made truly flexible working arrangements available to millions of Americans and has helped deliver myriad services to consumers — from just-in-time public relations work to delivery services to the spread of Christmas magic.
This red tape should be returned-to-sender so that our uniquely innovative and entrepreneurial economy can continue to deliver opportunity and joy.
Americans are used to beloved icons — from Dr. Seuss to Peter Pan to Mr. Potato Head — getting canceled for not living up to today’s politically correct standards. But it isn’t the woke mob coming for Santa Claus — it’s the bureaucracy.