America should celebrate all workers, not just unionized ones, this Labor Day week. To be pro-worker is to embrace all of us, including nonunionized, independent contractors and gig workers.
Since going into freelancing full time seven years ago, I’m more fulfilled, financially secure, and happier than ever. I maintain great working relationships with organizations I contract with and am not exploited. Because I control my work output, there’s little desire for me to return to a 9-to-5 job.
Some 39% of workers (65 million Americans), like me, now engage in full-time, part-time, or occasional freelance work. Many of these workers are women, who are now at risk of being displaced from the workforce should the Biden Labor Department proceed with its new independent contracting rule.
The Department of Labor is expected to publish a final rule redefining what an independent contractor is under the Fair Labor Standards Act, even though it lacks the authority to weigh in on a worker’s status. That power lies with Congress, not Biden bureaucrats.
The Biden administration argues its revised rule will combat “worker misclassification” by using an “economic realities” test to tilt the scales in favor of W-2 employee relationships over independent (1099 contractor) arrangements. This rule would rescind the 2021 “Independent Contractor Status Under the Fair Labor Standards Act” that heavily weighed two factors, a worker’s control over work scope and “the person’s opportunity for profit or loss,” to determine independent contractor status. The Trump-era rule made it easier to retain independent contractor status, whereas the Biden rule is expected to end that status for many of the nation’s freelancers.
Biden’s Labor Department was inspired by the pro-union Protecting the Right to Organize Act. The PRO Act, which relies on a controversial ABC test, assumes that workers are employees by default (not independent contractors) unless they meet obtuse criteria. California implemented an ABC test in January 2020, leading to the displacement of many California workers, particularly women, from the workforce. Heartbreaking stories from California independent contractors expose the damaging loss of income, small businesses, and livelihoods.
This new Labor Department guidance, unsurprisingly, puts the administration squarely at odds with women, a demographic of workers that increasingly favors freelance work over traditional employment.
Today, women comprise 52.3% of the freelance workforce. Women are choosing independent work opportunities that afford them greater flexibility and autonomy unseen in many 9-to-5 jobs. Additionally, these female workers are opting into these arrangements to avoid a toxic work environment and enjoy more professional fulfillment.
Restricting 1099 work under the auspices of fighting worker misclassification would forcibly reclassify millions of women as employees. Seventy-nine percent of independent contractors prefer to maintain their independent status as contingent workers, according to the Bureau of Labor Statistics. Women who take on primary caregiver responsibilities, for instance, need flexibility to perform their duties and can’t operate in traditional settings. Female workers are also turning to the gig economy for greater income-earning potential.
Even at the height of the COVID pandemic, self-employed women fared better than their W-2 counterparts, including mothers with young children. This was confirmed by a University of Michigan study that found working mothers often exit the labor market if unsatisfied with the lack of flexible work conditions.
Independent contracting’s innumerable benefits allow women such as me not to have to choose between careers and one day deciding to start our own families. That’s why 50% of the workforce is expected to be freelance by 2027-2028.
My independent status and that of my fellow 65 million freelancers shouldn’t be up for negotiation by the Department of Labor.